cbdt: IT department descends on instant loan application company; Rs 500 crore of funds illegally transferred abroad
“During the search, it was revealed that the company allegedly charged very high processing fees when the loans were disbursed.
“This translates into a higher indemnification burden for borrowers,” the Central Commission on Direct Taxes (CBDT) said in a statement.
He said the company is owned by a group based on Cayman Island, ultimately “controlled by an individual from a neighboring country.”
“The company brought nominal initial capital to India through foreign direct investment (FDI), but has taken out substantial working capital loans from Indian banks.
“The business model of the company results in a high turnover of capital, as evidenced by the turnover of Rs 10,000 crore in its first year of operation,” he said.
The CBDT, which oversees the department’s policy, said the company was found to have repatriated around 500 crore rupees to its overseas group companies under the guise of buying services in two years.
“However, evidence gathered during the search revealed that these group companies’ remittances are either grossly inflated or unauthentic.”
“The evidence found also indicates that the internal web application for lending activities was controlled from outside India,” he said.
The department also recorded statements from key individuals, including foreign nationals.