The Central Board of Direct Taxes (CBDT) has said that a fintech company engaged in giving instant loans through a mobile app has been found to have repatriated ₹ 500 crore “non-genuine” funds overseas. The Income Tax Department raided the company in Delhi and Gurgaon (Haryana) on November 9.
“During the search, it was revealed that the company has been allegedly charging a very high processing fee at the time of disbursement of loans. This results in an effective higher burden of compensation on the borrowers,” CBDT said in a statement.
It said the company is run by a group based in Cayman Island, ultimately “controlled by an individual of a neighbouring country.”
“The company has brought in India nominal initial capital by way of Foreign Direct Investment (FDI) but took substantial working capital loans from Indian banks. The business model of the company results in high rotation of capital, which is evidenced by turnover of ₹ 10,000 crore in its first year of operation,” it said.
The company was found to have repatriated about ₹ 500 crore to its overseas group companies under the pretext of buying services in two years.
“However, evidence gathered during the search has revealed that such remittances made to the group companies are either highly inflated or non-genuine. Evidence found also indicates that internal web-based application for lending business was controlled from outside India,” it said.
