The Income Tax Department has found that Hero MotoCorp
made over Rs 1,000 crore bogus expenses and more than Rs 100 crore cash
transactions for a farmhouse in Chhattarpur, Delhi, reported ANI citing
sources.

IT Department carried out raids on March 23 on
Hero MotoCorp and its chairman and managing director Pawan Munjal at multiple
locations in Delhi NCR which concluded on March 26.

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The search and seizure operations covered more than 40
premises spread over different locations in Delhi NCR.

According to ANI sources, a large number of incriminating
pieces of evidence in the form of hardcopy documents and digital data have been
seized during the search operations. This evidence disclosed that the group has
recorded bogus purchases, made huge unaccounted cash expenditures and obtained
accommodation entries, aggregating to the tune of more than Rs 1,000 crore.

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The IT Department has also found proof of cash
transactions of over Rs 100 crore in the purchase of a farmhouse on the
outskirts of Delhi. Pawan Munjal purchased a farmhouse in Chhattarpur where the
market price of the farmhouse was manipulated to save tax and black money was
used to pay more than Rs 100 crore in cash which is a violation of section 269
SS of the IT Act.

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Hero MotoCorp has issued a statement denying the reports
and called them “speculative”. It added that bogus expense
allegations are “not borne out of any document served on us or our internal
documents”. “We will inform Exchanges once I-T Dept concludes its
findings,” it further noted.

According to section 269SS of the Income Tax Act, while
transacting Immovable Property, a 100% penalty will be imposed if the seller
has received an amount of Rs 20,000 or more in cash from the buyer.

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Last week, the IT Department raided the offices and
residential premises of promoters of Hero MotoCorp. The search includes the
residence and office premises of Pawan Munjal. The statements of those present
at the location where the searches are being conducted were recorded, and
panchnama was done.

On Tuesday, Hero MotoCorp shares slipped 6.68% to close at Rs 2,219.00.