Wire and cable manufacturer Polycab is facing allegations of tax evasion, with the Income Tax Department identifying ₹200 crore in undisclosed income. Polycab, however, strongly denies any wrongdoing, stating that they have not received any official communication from the department regarding the alleged evasion, as reported by CNBC-TV18.
Following the news, Polycab’s share price experienced a decline, dropping by 7.33% to ₹4952.95 on the BSE as of January 9, 2023, at 13:02 pm. According to reports, the Income Tax Department recently conducted searches at Polycab’s premises, revealing discrepancies in financial records. Sources indicate that the department is planning to issue a notice to the company, seeking payment for the alleged evaded taxes along with applicable penalties.
The Income Tax Department has identified transactions amounting to ₹250-300 crore in the accounts of the company’s promoters. The department claims to have accumulated evidence covering the last 5-6 years from Polycab’s accounts. Consequently, the I-T Department has sought an explanation from the promoters.
In response, Polycab, in communication with CNBC-TV18, denies reports of tax evasion and asserts that they have not received any communication from the Income Tax Department regarding the search outcomes.
Earlier reports by Livemint suggested that residences and offices of top management associated with the wire and cable manufacturer were also subjected to raids. The specific reasons behind the Income Tax Department’s searches and the nature of the investigation remain unclear. The Bombay Stock Exchange has sought clarification from the company regarding these raids.
Despite this setback, Polycab’s stock has demonstrated significant growth, witnessing a surge of 109% over the past year and 113% in 2023. Over a three-year period, the shares of this wire and cable maker delivered substantial returns, showing a remarkable growth of 449%.
