Income Tax Department launched a major crackdown on 12 companies across Delhi, Rajasthan, and Uttar Pradesh suspected of fake billing in dairy, ghee, vegetable oil, and whey protein. Investigations revealed suspicious end-of-year transactions, round figures, and TDS irregularities, possibly involving crores of rupees. The probe follows FDA input on adulteration and may expand to other sectors.

Income Tax Department Launches Major Crackdown on Fake Commodity Operations

The Income Tax Department has initiated a significant crackdown, targeting over a dozen companies suspected of widespread bogus billing in the dairy, ghee, vegetable oil, and whey protein sectors. The operation, spanning Delhi, Rajasthan, and Uttar Pradesh, aims to uncover fraudulent transactions potentially worth crores of rupees.

Unraveling Fake Transactions

Investigators are scrutinizing 12 entities involved in the manufacturing and trade of essential food items. This action follows intelligence shared by the Food & Drug Administration (FDA), which detected adulteration in milk, ghee, and cold drinks. The tax authorities are now connecting product safety issues with suspicious financial dealings.

Red Flags in Financial Patterns

Several financial irregularities have surfaced during the preliminary inquiry. A key concern is the clustering of substantial sales and purchase adjustments precisely around the financial year-end, particularly on January 31, February 28, and March 31. This timing suggests attempts to artificially balance accounts before annual closure.

Furthermore, investigators noted transactions exceeding ₹1 crore in a single financial year being routed through just one or two entries with single counterparties. Such patterns deviate from typical business operations, where dealings are usually spread out and involve multiple interactions.

The prevalence of perfectly rounded figures in high-value transactions also raises suspicion. Prices for commodities like dairy and edible oils typically fluctuate based on quality, weight, and market conditions, making precise, round-number deals unlikely for genuine trade.

TDS and Verification Challenges

Suspicious patterns in Tax Deducted at Source (TDS) payments have further fueled the investigation. In multiple instances, TDS was paid in a single month or exhibited unusually long gaps between payments, contrasting with the continuous deduction expected in legitimate businesses.

The probe has extended to related-party transactions, commonly used to shift funds or inflate expenses. Tax officials are cross-referencing financial records with physical evidence, including CCTV footage, to confirm the actual movement of goods against recorded invoices. This verification is particularly critical for perishable items like milk and dairy products.

Scope Expansion

Sources indicate the investigation is poised to expand into other sectors, including fertilizers and pharmaceuticals, suggesting a broader effort to curb financial irregularities across industries.

Source : Dairynews7x7 Jan 17th 2026 Read full story here