The Income Tax Department detected a tax evasion of more than Rs 700 crore after it recently raided several sites of Chennai-based Chettinad Group, the CBDT and official sources said on Tuesday.
“The culmination of the search includes a seizure of uncountable money of Rs 23 crore from various locations,” the CBDT said in a statement.
“So far the department has managed to detect revenue avoidance of more than Rs 700 crore,” it said.
The statement claimed that tax detectives also detected documents related to possession of “foreign assets under the crown of 110 rupees in the form of fixed deposits which were not disclosed in the return (income tax) and will attract actions under the Black Money Act”.
The taxman raided 60 regions of the group in Tamil Nadu in Chennai, Trichy (Tiruchirappalli), various locations in Andhra Pradesh, Karnataka and Mumbai on 9 December.
While the CBDT said its action and further detections had been made against “a major trading group operating out of Chennai, based on reports of tax fraud,” official sources identified it as the 100-year-old Chettinad Group.
The group is engaged in business activities such as cement manufacturing, logistics, construction, among others, CBDT said.
“Inflation of spending to raise money and also to reduce profits, receipts not fully calculated, also identified a false claim of depreciation of Rs 435 crore.
“There are indications of revenue from capital fees for medical admissions to graduate programs,” the statement said.
The Central Board of Direct Taxes is the managing authority for the IT department.
The statement added that “details were found on the actual financial transaction between the sought-after group and another group for the sale of three infrastructure facilities in various ports”. “Complex financial arrangements creating false liabilities from their own concerns have also been made, apparently, to reduce the capital gains resulting from this transfer,” it said. It added that capital gains reaching around Rs 280 were achieved.
“Similarly, huge capital conduct through a network of counterfeit corporate transactions within the group is also under the scanner,” the statement said.
A large number of cabinets belonging to the group have been identified that will work in a timely manner, even as the search is temporarily over and investigations are still progressing, it said.