Income Tax Department carried out a search and seizure operation on 20.07.2022 on two business groups; one engaged in real estate, and the other in contracts related to road and railway construction. The search operation covered more than 30 premises located in and around Madurai and Chennai.

As a result of search action on these groups, a large number of incriminating evidences including documents and digital data have been found and seized. In the case of the group involved in real estate business, these evidences have revealed that the group has indulged in large scale tax evasion by accepting huge unaccounted cash by way of on-money. The group was using a software to maintain parallel set of books of such unaccounted cash transactions.

In the case of the other group involved in the business of construction contracts, it is found that the group was involved in large scale tax evasion by debiting bogus sub-contract expenses and inflation of purchases of various raw material through self-made vouchers. In the modus-operandi followed by the group, the contract amounts were paid to bogus sub-contractors through banking channels, and after withdrawal, the cash was returned to the assessee group.

The search operation in these groups has revealed unaccounted income exceeding Rs. 150 crore.

Unaccounted cash exceeding Rs. 14 crore and unaccounted gold and jewellery valued at over Rs. 10 crore have been seized during the course of the search action.

Further investigations are in progress.

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RM/MV/KMN

Tax evasion detection: searches uncovered parallel books and bogus expenses, prompting seizures and continuing investigation. A coordinated search and seizure operation on two business groups uncovered documents and digital data showing receipt of unaccounted cash and maintenance of parallel books in the real estate group, and use of bogus sub contract expenses, inflated purchase vouchers, and routing of contract proceeds through sham sub contractors in the construction group. The searches revealed substantial unaccounted income and resulted in seizures of unaccounted cash and valuable jewellery; forensic examination of seized material is ongoing.