IT department raids two business groups in Tamil Nadu, undisclosed income unearthed

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The Income Tax Department on Tuesday said that it carried out search and seizure operations on July 6 on two business groups of Tamil Nadu engaged in the business of civil contracts, real estate, and advertising.

The undisclosed income of the groups detected so far is estimated at more than Rs 500 crore, an official said.

The search operations were carried out at more than 40 premises located in Chennai, Coimbatore, and Madurai, and during them, various incriminating documentary and digital evidence were seized.

The preliminary examination of such evidence indicates that both these groups have been suppressing their taxable income by claiming bogus purchases and expenses in their books of account over the last few years, the official said.

“In the case of one of the groups, it has been found that the payments made for these bogus purchases etc. were being received back in cash by the group. In addition, evidence have been found indicating suppression of huge income on account of sharing of profits in joint ventures, which is not reflected in the regular books of accounts,” the official said.

The official further said that in the case of the second group, it was found that the group had created a number of bogus entities which were being used for claiming bogus purchases and sub-contract expenses.

Secret hideouts, maintained by the group for keeping documentary and electronic records in respect of such unaccounted and bogus transactions, were also discovered by the search team.

Evidence showing the introduction of bogus capital and loan liabilities in the books of accounts of some group concerns has also been unearthed.

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