The Income Tax department has detected a "large-scale tax evasion" of over Rs 400 crore after recently raiding a Tamil Nadu-based group engaged in liquor manufacturing and hospitality, the Central Board of Direct Taxes (CBDT) said on Monday, June 20. The raids were launched on June 15 and more than 40 premises in cities such as Chennai, Viluppuram, Coimbatore, and Hyderabad were covered. The CBDT frames policy for the tax department.
"Undisclosed cash of Rs 3 crore and unaccounted gold jewellery worth Rs 2.5 crore have been seized so far," the CBDT said in a statement. It, however, did not identify the business group but said that it is engaged in logistics, entertainment, hospitality and liquor manufacturing. However, when the raids first began, reports had stated that the company in question was the MGM Group, which runs the popular theme park MGM Dizzee World in Chennai.
An analysis of the seized documents and digital gadgets "indicates that the assessee group has indulged in large-scale tax evasion exceeding Rs 400 crore by debiting non-genuine purchase bills in the books of account of varied businesses. These non-genuine purchase bills were either obtained from its regular material suppliers or accommodation entry providers (fake business entry providers)," the statement said.
The seized documents reportedly show that payments made to the material suppliers through cheques have been received back in "cash" for making "unaccounted" investments and also for other purposes. "The group is also found to be controlling back-office operations of its international chain of hotels from India," it said and added that the group is also found to be controlling back-office operations of its international chain of hotels from India. Further probe is underway by CBDT officials.