Tax evasion by furniture manufacturer unearthed

ISLAMABAD: FBR has unearthed mega scam involving leading brand manufacturer of furniture in Lahore in alleged tax evasion of million of rupees, it is learnt.
According to the details gathered by The News on Monday, the Directorate General of Intelligence and Investigation (Inland Revenue) of Lahore received credible information regarding evasion of sales tax and income tax by one furniture manufacturer with famous brand name. The FBR has raided the offices of the furniture manufacturer and confiscated records.
The initial findings of the record disclosed that the registered person was allegedly maintaining bank accounts that had not been declared to the tax authorities and the said manufacturer of furniture was parking receipts of undeclared/suppressed sales in those accounts. He had also concealed details of its manufacturing facilities and showrooms situated in various cities of Pakistan with the intent to conceal sales from those premises.
As per online verification of data available on FBR site the concerned manufacturer was registered as an individual and was engaged in the manufacturing of furniture and its business nature was reported as manufacturer cum importer cum retailer.
The registered person had declared its business head office in Lahore.
A team of officers and officials from the Directorate of Intelligence & Investigation (Inland Revenue) Lahore was constituted by Additional Director Dr. Javed Iqbal Sheikh, comprising Mr. Muhammad Imran Deputy Director, Jamshed Yousaf, Superintendent and Mr. Shahzad Ahmad Goraya and other officers/officials to conduct raid at the business premises of the registered person in Lahore to take the relevant record into custody.
The team obtained search warrant from the area magistrate under section 40 of the Sales Tax Act 1990 read with the relevant provisions of CrPC 1898, and the raid was conducted at the aforesaid business premises of the registered person after fulfilling all the legal formalities.
All the record available at the premises was taken into custody including CPUs, laptops, hard disks, gate passes, order books, ledgers, daybooks, utility bills, quotation files/books etc.
Preliminary investigation in the matter and the examination of the record retrieved from the business premises of the registered person revealed that two unreported (concealed) bank accounts of the registered person were being maintained at branches of two local banks.
Total credits in those account exceeded by 150% of the sales reported by the manufacturer, not to mention that those credits were mostly cash and the taxpayer had reported sales against banking instruments also. Efforts are underway to unearth more bank accounts of the registered person. The registered person is conducting manufacturing activity at six (6) different premises in Islamabad, Lahore and Karachi apart from having showrooms in those cities, but has declared its business address in Lahore.
It is prima facie an attempt to conceal the actual quantum of business. Preliminary examination of the record taken into custody by the investigation officer further revealed that the registered person has received purchases from the un-registered persons and made sales to numerous individuals/un-registered persons. Thus the registered person is engaged in out of books purchases/sales, which is being probed in the light of the available record.
Over 560 employees work at the manufacturing premises of the registered person and the clients of the registered person include leading multinational companies, corporate clients, banks and government departments. The sales, which have been reported around Rs700 million, are not commensurate with the actual quantum of business of the registered person. Keeping in view the aforesaid facts the said raid was conducted to safeguard the revenue.