The Income Tax Department carried out search and seizure operations on 03-03-2021on two groups of civil contractors in Southern Tamil Nadu. Searches and surveys were conducted in 18 premises mainly in Madurai and Ramnad districts.

Based on intelligence inputs about the existence of cash, which is likely to be distributed for election purposes, searches were mounted on the business groups. The action resulted in the finding of unaccounted cash of ₹ 3 crore which was seized.

Other findings include the identification of the fact that the assessee is booking bogus expenses under various heads to reduce the profits. The declared profits were less than 2% of the turnover, when in actual accounts the profits exceeded 20%. Similarly more than 100 subcontractors were introduced to book expenses to meet illegal payments, and on-money payments for property purchases. These subcontractors introduced, had filed returns of income from the same IP address, and for the first time ever, showing only this receipt as their sole income.

As a result of the search, unaccounted income of ₹ 175 crore has been detected and unaccounted cash of ₹ 3 crore has been seized.

 Further investigations are in progress.

Search and seizure operations uncover unaccounted income and bogus expenses, prompting expanded tax investigation and seizures. The Income Tax Department carried out search and seizure operations on civil contractor groups after intelligence of cash for election distribution; searches uncovered systematic under reporting via bogus expenses, over one hundred subcontractors used to route illegal payments and on money property deals, and concurrent filings from the same IP addresses. Resulting operational findings include seizure of unaccounted cash and detection of substantial unaccounted income, with further investigations ongoing.