Income Tax Department carried out search and seizure operation on Neyveli based group engaged in business of chit funds & real estate

On December 16, 2021, the Income Tax Department conducted a search and seizure operation on a Neyveli-based organisation engaged in the business of chit funds, finance, and real estate. Through its trusts, the group also operates educational institutions. The search encompassed approximately 30 premises in various locations such as Neyveli, Chennai, Coimbatore, Nilgiris, and so on.

During the search, a remotely located cloud server carrying a parallel set of books of account surreptitiously maintained by key members of the organisation was discovered. A variety of documentary and digital material has also been confiscated. The preliminary investigation of these digital evidences and other associated evidences clearly discloses the details of unaccounted money earned through under-reporting of chit fund company income and cash deposits received from various parties. The recovered evidences further show that the unexplained money was used to make ‘on-money’ payments for investments in the real estate sector. According to preliminary estimates, the amount of unexplained cash transactions in immovable assets totals Rs. 250 crore.

The search action has led to seizure of unaccounted cash of more than Rs.12 crore.

Further investigations are in progress.