- Income Tax Department targets 12 companies in fake dairy and edible oil sales probe
- Search and survey operations ongoing in Delhi, Rajasthan, and Uttar Pradesh
- Suspicious year-end transactions and round figures indicate bogus billing
The Income Tax Department has launched a major crackdown on companies allegedly involved in the selling of fake dairy, edible oil, whey protein etc, suspecting crores of rupees in bogus sales and purchase transactions linked to these products.
According to sources familiar with the matter, at least 12 companies engaged in the manufacture and trade of milk, ghee, vegetable oil and whey protein are currently under the scanner. Search and survey operations have been initiated across Delhi, Rajasthan and Uttar Pradesh, as investigators examined both physical premises and financial records.
The action follows the inputs shared by Food & Drug Administration (FDA) after detecting adulteration in commonly consumed items such as milk, ghee and cold drinks. The information reportedly helped tax authorities identify firms where unsafe products and suspicious financial practices appeared to go hand-in-hand.
During the preliminary enquiry, the timing of transactions emerged as a major red flag. A large number of sales and purchase adjustments were found clustered around the end of the financial year — particularly on Jan. 31, Feb. 28 and March 31. Officials say these dates are frequently used to square off accounts and artificially align books before annual closure.
Another suspicious pattern was the size and frequency of transactions. In a normal commercial setup, dealings with a single counterparty are spread over the year. In several cases under review, however, transactions exceeding Rs 1 crore in a single financial year were allegedly routed through just one or two entries — often close to the year-end. Investigators view such bunching as inconsistent with genuine business operations.
Officials were also struck by the widespread use of round figures in high-value transactions. In sectors like dairy and edible oils, prices usually vary based on weight, fat content, quality and market conditions. “Perfectly rounded numbers, whether TDS is deducted or not, are a strong indicator of non-genuine billing,” a source said.
TDS payment behaviour added to the suspicion. In several cases, TDS was paid in a single month rather than periodically, or there were unusually long gaps between payments. Investigators say genuine businesses tend to show continuity in TDS deductions across the year, mirroring the flow of transactions.
The investigation has also widened to related-party transactions, which are often used to rotate funds or inflate expenses. Officials are matching books with operational evidence, including CCTV footage, to verify whether goods actually moved against the invoices recorded.
This physical verification is particularly crucial in cases involving perishable commodities like milk and dairy products, where stock movement is frequent and difficult to fake without leaving operational footprints.
The investigation will be widened soon to more sectors including fertilisers and pharma, the sources added.
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