The Income Tax Department seized Rs 6.76 crore of unaccounted cash from four government contractors in Mysuru in poll-bound Karnataka, an official said on Thursday.
"Rs 6.76 crore in bundles of Rs 2,000 and Rs 500 notes that were not accounted for were seized from four of the 10 contractors raided from April 24-26 by our investigation wing," said Joint Income Tax Commissioner G. Ramesh in a statement in Bengaluru.
Since the assembly elections were announced on March 27, the tax department has seized Rs 10.62 crore unaccounted cash and gold jewellery valued at Rs 1.33 crore.
"The cash in higher denomination notes was found in the lockers of the contractors under fake names," Ramesh told IANS.
Income Tax sleuths on Wednesday raided offices and homes of 10 contractors at Mysuru for alleged tax evasion.
"Raids were conducted by the officials of our investigation wing on one contractor in Bengaluru and 10 contractors at Mysuru. They work on projects of the state government's department through tendering," said Ramesh.
The department has linked the shortage of currency notes in some states across the country to the hoarding of cash by government contractors in Karnataka.
"Reports of shortage of currency notes in certain parts of the country have been making the rounds. Recent searches by our officials indicated that one reason is hoarding of cash by government contractors in Karnataka," said Ramesh.
Intelligence collected by the investigation wing of the tax department also indicated that several contractors across the state were possessing huge stocks of cash in Rs 2,000 and Rs 500 notes.
Earlier, the tax sleuths seized Rs 4.13 crore in cash and 4.52 kg gold jewellery valued at Rs 1.32 crore during raids conducted across the state over the last three weeks.
"Of the Rs 4.13 crore seized, Rs 4.03 crore is in Rs 2,000 and Rs 500 currency notes, with Bengaluru accounting for Rs 2.47 crore and Ballari Rs 55 lakh," said Ramesh in a statement on April 21.
The tax department stepped up surveillance and monitoring of activities in view of the single-phase election on May 12 to the 224-member Karnataka Assembly.