Kathmandu – Agni Group, long considered clean in tax matters, is now caught in a major tax fraud.

Agni Incorporated Pvt. Ltd., a subsidiary of the group, evaded taxes worth over Rs 72.7 million in a land and building sale.

In fiscal year 2079/80 BS (2022/23 AD), the company sold property in Kathmandu’s Ward No. 15 for Rs 607.4 million. But it reported minimal profit and paid no tax on the actual gain.

The company also undervalued the property at the Land Revenue Office, showing a lower sale price than the real one. This helped it dodge more taxes.

Both Agni Incorporated and Agni Logistics, part of the same group, carried out the deal. Because the buyer and seller were from the same group, the tax liability stayed within. Executives, including Cabinet Shrestha, reportedly hid the profit and submitted misleading financials to avoid taxes.

Agni Incorporated sold about 6–7 ropanis of land and a building in Swayambhu to Agni Logistics. The deal showed a Rs 158.2 million profit, but the company left this out of its taxable income.

As Mahindra and  Mahindra’s official distributor in Nepal, Agni has been a major automobile seller and falls under the Large Taxpayers Office.

The Office of the Auditor General, in its 62nd report, identified the tax evasion. The report stated that Agni Incorporated failed to include the Rs 158.2 million profit in its tax filing.

As a result, it owes Rs 37.9 million in income tax, plus interest and penalties.

The report also found a mismatch in property value. The Department of Land Management showed the sale at Rs 669.2 million. But Agni's financial report mentioned only Rs 530.3 million—Rs 346.2 million for land and Rs 184.1 million for the building.

This means Rs 138.9 million was underreported, resulting in an additional Rs 34.7 million in unpaid tax.

In total, Agni Incorporated evaded Rs 72.76 million in taxes.

The Auditor General has asked the Large Taxpayers Office to recover the full amount, including penalties and interest.

The tax office is now expected to take action.