No written communication from I-T Dept on searches: Polycab

Earlier Thursday, the company issued another statement saying stock exchanges have sought a clarification from the company about news reports related to the Income Tax searches. Polycab India shares plummeted 21 per cent Thursday, eroding Rs 15,485.96 crore from its market valuation.

The company’s share prices started to decline Tuesday after reports alleged that the tax department found tax evasion by the company. Polycab, however, told stock exchanges that it had not received any communication from the I-T Department regarding the outcome of the search while maintaining that it fully cooperated with the tax officials during the search in December.

Tax officials said Wednesday in a statement that preliminary analysis suggested that the company indulged in unaccounted cash sales, cash payments for unaccounted purchases, non-genuine transport and sub-contracting expenses, etc for suppression of its taxable income.

Unaccounted cash sales of around Rs 1,000 crore, evidence of unaccounted cash payments of more than Rs 400 crore made by a distributor and non-genuine expenses in the nature of sub-contracting expenses, purchases and transport expenses, etc. aggregating to about  Rs 100 crore were identified as seized evidence, the CBDT said.

On Thursday, the company’s stock plunged 21.08 per cent to settle at Rs 3,877.40 on the BSE. During the day, shares of the company fell sharply by 22.40 per cent to Rs 3,812.35. At the NSE, it fell 20.50 per cent to Rs 3,904.70.

Polycab India then issued clarification on stock exchanges late Thursday stating that the company will continue to fully cooperate with the Income Tax Department in this regard. “The Company understands that there is a press release titled ‘Income Tax Department conducts search operations in Mumbai’ published on January 10, 2024 (at 8:06 pm) by Press Information Bureau, Delhi, which does not specifically name any company. The Company reiterates that as on date, the Company has not received any written communication from the IT Department regarding the outcome of the search. As indicated above, the Company has made intimation from time to time in relation to the said search proceeding. While the post search proceedings will take its own course, the Company will continue to fully cooperate with the IT Department in this regard,” Polycab India said in the clarification to the BSE.