TN: IT sleuths raid coaching institutes in Namakkal, Rs 30 cr unaccounted cash seized

The Income Tax (IT) Department has conducted a search on coaching institutes in Tamil Nadu's Namakkal district in connection with a case pertaining to a business group and seized Rs 30 crore of unaccounted cash and other things during the raid.

Based on preliminary findings, the undisclosed income of the group is estimated at more than Rs 150 crore.

The raid was carried out on Friday and the business group is mainly into the running of educational institutions, and coaching institutes for competitive exams like NEET, the Central Board of Direct Taxes (CBDT) said in a statement.

"The group comprises several partnership firms and a trust controlled by a closely-knit group of individuals. The search action covered 17 premises including residential premises of the group's promoters. The premises are located in Namakkal, Perundurai, Karur and Chennai in Tamil Nadu," it said.

The raid was undertaken on the basis of intelligence that the group was allegedly indulging in substantial tax evasion by suppression of fee receipts received from students.

"The modus operandi was to receive part of the fees in cash and such cash receipts were invariably not entered in the regular books of accounts. Instead, such receipts were maintained in a separate set of accounts," the CBDT said.

It said incriminating evidence of such suppression of receipts has been found during the search in the form of accounts maintained in diaries, in electronic storage devices and also in the form of huge sums of unaccounted cash.

It was found that cash was kept in lockers in banks in the names of employees who acted as 'benami' lenders.

The IT sleuths found a significant amount of cash in a safe inside an auditorium in the main school premises.

"Unaccounted cash of about Rs 30 crore has been found and seized. The unaccounted receipts were deployed for acquiring immovable properties as personal investments which were then leased for long term to the trust for expanding to other towns," the CBDT statement said.

"It was also found that highly-priced faculty were hired and employed in the coaching institutes and they were paid outside the books. Based on preliminary findings, the undisclosed income of the group is estimated at more than Rs 150 crore," the statement added.