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Taxmen seize 17 kg gold jewellery in raids on silk saree seller, chit fund group in Kanchipuram

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IT Department has seized a staggering 17 kg of gold jewellery in raids

The Income Tax Department has seized a staggering 17 kg of gold jewellery in raids carried out on Tuesday on two business groups of Kanchipuram and unearthed a black money trail of Rs 550 crore. While one of the group’s is a Chit Fund and Financing company, the other is a retailer of silk sarees and garments, according to information provided by the Income Tax Department on Sunday.

Gold jewellery weighing about 7.5 kg and unaccounted cash of Rs. 1.35 crore has been seized from the Chit Fund group while 9.5 kg of gold jewellery and Rs 44 lakh in hard cash has been seized from the silk saree retailer.   

The search operations were carried out at 34 premises located in Kanchipuram, Chennai and Vellore.

The Chit Fund group was found to be running an unauthorised chit fund business, and all the investments and pay-outs of more than Rs. 400 crore, in the last few years, were done entirely in cash. Evidence revealed that the group had earned unaccounted income by way of commission and dividends.

Also read:  Income Tax Dept. ferrets out Rs 450 crore in black money in raid on leading textile manufacturer

Numerous Promissory notes, signed post-dated cheques and power of attorney documents kept as collateral for the loans given or from chit subscribers have also been seized. The group had also earned unaccounted interest income from cash financing and had huge unaccounted investments and expenses. 

Many property documents registered in the names of group members and their associates have been found and seized. Properties owned by this group’s members include palatial homes, farm houses and land, luxury vehicles, etc. However, they either had not filed any tax returns or had disclosed negligible income in their tax returns, so far.

Many associates and investors of the chit fund were investigated and they have also admitted to have made unaccounted investments and earned unaccounted income.

In the case of the other group, engaged in business of Silk Sarees and other garments, the undisclosed income detected, so far, in this group is more than Rs. 150 crore.

Evidence was found relating to sales suppression during the last 4 years. The manipulation of sales figures through a customized software application was detected. After such manipulations, the group members used to take out the unaccounted cash on a regular basis, and made unaccounted investments in land and buildings. The group members also used to incur huge cash expenses on a lavish lifestyle, give/ repay cash loans and make chit investments.

Further investigations in both these cases are still in progress.