The Income Tax Department carried out search and seizure operations on 23.09.2021 on two private Syndicate Financing groups based in Chennai. The search operation was carried out at 35 premises located in Chennai.

The evidence found in the premises of the financiers and their associates revealed that these groups have lent to various big corporate houses and businesses in Tamil Nadu, a substantial portion of which is in cash. During the search, it was detected that they are charging high rate of interest, a part of which is not offered to tax. The modus operandi adopted by the groups revealed that most of the interest payments by borrowers are received in dummy bank accounts and the same has not been disclosed for tax purposes. Further, the unaccounted monies are disguised and brought into the books of account of the groups as unsecured loans, sundry creditors, etc. 

Other evidence found during the course of the search revealed numerous undisclosed property investments and other income suppression by these persons.

The searches, so far, have resulted in the detection of undisclosed income of more than ₹ 300 crore. Unaccounted cash of ₹ 9 crore has been seized so far.

Further investigations are in progress.

Search and seizure operations reveal undisclosed income and tax evasion through dummy accounts; investigations ongoing. Income Tax Department search and seizure operations on syndicate financiers in Chennai found cash lending, high interest partly undisclosed to tax, routing interest payments through dummy bank accounts, and disguising unaccounted funds as unsecured loans and sundry creditors; searches also revealed undisclosed property investments and other suppressed income, with seizures made and further investigations ongoing.