The Income Tax Department carried out search and seizure operations on 02.08.2022 in the cases of certain producers, distributors, and financiers associated with the film Industry. The search operations were conducted at almost 40 premises located in Chennai, Madurai, Coimbatore and Vellore.

During the course of the search operations, several incriminating documents and digital evidence etc., relating to unaccounted cash transactions and investments have been seized. Secret and hidden premises have also been unearthed during the search.

The searches in the cases of film financiers have revealed documents like promissory notes etc., relating to unaccounted cash loans, which were advanced to various film production houses and others. In the cases of film production houses, evidences reveal tax evasion, as the actual amounts realized from the release of the films are much more than the amounts shown in the regular books of account. The unaccounted income so generated by them is deployed for undisclosed investments as well as for various undisclosed payments.

Similarly, evidences seized in the cases of film distributors, indicate collection of unaccounted cash from the theatres. As per the evidences, the distributors have formed syndicates and have systematically suppressed the theatre collections, resulting in the suppression of actual income.

So far, the search operation has resulted in detection of undisclosed income exceeding Rs. 200 crore. Undisclosed cash of Rs.26 crore and unaccounted gold jewellery exceeding Rs. 3 crore have been seized.

Further investigations are in progress.

Search and seizure operations uncover film industry tax evasion and undisclosed income, prompting ongoing investigations. The Income Tax Department conducted search and seizure operations at around 40 premises linked to film producers, distributors, and financiers, seizing documents and digital evidence of unaccounted cash transactions, hidden premises, promissory notes for unaccounted loans, and records indicating understatement of theatrical receipts. Evidence shows deployment of undeclared income into undisclosed investments and collusive suppression of theatre collections by distributors. Significant undisclosed income and seizures of cash and gold have been detected, and investigations continue.