The Income Tax Department has uncovered unaccounted cash sales amounting to Rs. 1000 crores related to Polycab. Consequently, the revelation of this undisclosed income has had a substantial impact on the company’s financial standing. The company’s representative denied the accusations.
In the morning of January 2023, the shares of Polycab experienced a significant decline, plummeting by 22%. This downturn in share value is directly attributed to the identification of the undisclosed income by the Income Tax Department, reflecting the potential ramifications of such revelations on the market perception and investor confidence in the company.
On January 10, the Income Tax Department conducted searches at various locations affiliated with Polycab. The operation extended to 50 premises belonging to the company, spanning across key locations such as Mumbai, Pune, Aurangabad, and Nashik in Maharashtra, as well as Daman, Halol in Gujarat, and Delhi. The reach of these searches also extended to include authorised distributors associated with the group, as indicated by the Central Board of Direct Taxes (CBDT).
While the official CBDT statement did not explicitly identify the group in question, sources reported to PTI confirmed it to be Polycab India, reported Money Control. The search operation, encompassing both the company’s premises and those of its authorised distributors, suggests a comprehensive effort by the Income Tax Department to scrutinise financial transactions and undisclosed income associated with the Polycab group. This development raises questions about the financial transparency and compliance of the company and its distributors with tax regulations.
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