Income Tax Department conducts searches in Kanchipuram, Chennai and Vellore
On October 5, 2021, the Income Tax Department conducted searches in two Kanchipuram instances, one involving a Chit Fund and Financing Group and the other involving a retailer of Silk Sarees and other clothes. The search efforts took place in 34 locations across Kanchipuram, Chennai, and Vellore.
In the instance of the Chit Fund group, it was discovered that they were operating an unlicensed chit fund operation, with all investments and payouts totaling more than Rs. 400 crore made in cash over the last few years. The organisation had received unauthorised income through commissions and dividends, according to the evidence.
A large number of promissory notes, signed post-dated cheques, and power of attorney documents were seized as security for loans issued to or from chit subscribers. The company also had large unreported investments and expenses, as well as unaccounted interest income from cash borrowing.
Many property documents in the names of members of the gang and their associates have been discovered and seized. This group’s members own palatial homes, farm houses and lands, fancy vehicles, and so on, despite the fact that they were either non-filers or had revealed insignificant income in their tax returns up to this point.
Many of the chit fund’s associates and investors were probed, and they admitted to making unaccounted investments and earning unexplained revenue. A total of Rs. 1.35 crore in unaccounted cash and 7.5 kilogramme of gold jewellery has been confiscated. So far, this group has an undeclared income of more than Rs. 150 crore.
Evidence of sales suppression for the last four years was discovered in the instance of the other organisation, which was in the business of selling Silk Sarees and other clothing. The use of a customised software application to manipulate sales data was discovered. Following such deceptions, the gang members routinely took out unaccounted funds and made unaccounted investments in property and structures. Members of the organisation would also spend a lot of money on a luxury lifestyle, offer and repay cash loans, invest in Chits, and so on.
A total of Rs. 44 lakh in unaccounted cash and 9.5 kilogrammes of gold jewellery have been seized. So far, this group has an undeclared income of more than Rs. 100 crore.
In both of these incidents, more research is underway.