Income Tax Dept raids multiple premises in Tamil Nadu, unearths chit fund business

The Income Tax Department conducted search and seizure operations on October 5 in two cases of fraud in Tamil Nadu. As informed by the Ministry of Finance on Sunday, the search operations were carried out at 34 premises located in Kanchipuram, Chennai, and Vellore in connection to a chit fund case of a financing group and a retailer of silk sarees and other garments. 

According to the CBDT statement, a total of Rs 250 crore unaccounted cash and 9.5 kg of gold jewellery has been seized through the raids conducted on multiple premises. 

Unaccounted cash and gold seized during IT raids in Tamil Nadu

According to the official statement, during the raids on the chit fund group, it was found that the group was running an unauthorised chit fund business and all its investments and payouts stand at more than Rs 400 crore in the last few years. Furthermore, the group has also earned unaccounted income through commission and dividends. Evidence including numerous promissory notes, signed post-dated cheques, power of attorney documents, unaccounted investments and expenses, property documents were also found by the IT team.

The property documents seized by the IT officials included documents of palatial homes, farmhouses and lands, luxury vehicles, and many more. Apart from that, unaccounted cash of Rs 1.35 crore crude and about 7.5 kg gold jewellery were seized. 

Further talking about retailer of silk sarees and other garments, the department found evidence relating to sales suppression in the last four years. It reported that the manipulation of sales figures through a customised software application was detected after which the group members used to take out unaccounted cash on a daily basis and further make investments in land and buildings.

The IT team has also seized unaccounted cash of Rs 44 lakh and about 9.5 kg of gold jewellery after the raid.

Meanwhile, investigations are underway in both cases. 

IT department raids multiple cities across the country

Several raids were conducted by the Income Tax Department in some major states such as Maharashtra, Karnataka, and Uttar Pradesh across the country. The IT department was suspicious that there were groups and individuals from various businesses associated with a huge web of undisclosed foreign bank accounts and assets. The finance ministry released a statement saying that these groups/individuals utilised the services of a Dubai-based financial service provider to create a dubious and complex web of foreign companies and trusts based in tax havens such as Mauritius, the UAE, BVI, Gibraltar, etc. to hold their unaccounted assets. 

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