The Income Tax Department has detected undisclosed income to the tune of Rs 500 crore in a search and seizure operation on a group engaged in manufacturing and export of jewellery and coloured gemstones at Jaipur, according to a finance ministry statement.

The search action has also resulted in seizure of Rs 4 crore in hard cash and jewellery valued at Rs. 9 crore. The raid was conducted on November 23 covering more than 50 premises of the group at various locations in and around Jaipur, the official statement said.

Amongst the various transactions unearthed, the group has already admitted to Rs 72 crore as being an undisclosed amount. 

During the course of the search, it was found that the rough of semi-precious and precious stones is imported from African countries and then processed in Jaipur. The yield of cut and polished stones is suppressed and part of it is sold in cash, generating unaccounted income which is not recorded in the books of accounts.

Such unaccounted income is then used to earn interest by providing cash loans through a finance broker. The search team has seized documentary and digital evidence of disbursements of such cash loans and interest earned thereon. The nature of these transactions has been admitted by the finance broker.

Apart from this, incriminating evidence relating to unaccounted sales and purchases, difference in stock, non-genuine unsecured loans and share application money have also been found.

Documents have also been found from entities of the group operating from a Special Economic Zone (SEZ), indicating that they are indulging in unfair practices for declaring higher profits from these units as the income from these units is eligible for exemption under Section 10AA of the Income-tax Act, 1961.

Further investigations are still in progress.

Also read: Rs 600 crore in black money detected in tax raids on two Gurugram business groups