I-T Dept says it conducted raids on Chennai's MGM properties, alleges Rs 400 cr tax default

The Income Tax Department conducted search and seizure operations at MGM Properties, a major industrial group in Chennai, on Wednesday (15th June) last week. In a notification released today by the Ministry of Finance, the I-T department has accused the business group of large-scale tax evasion to the tune of Rs 400 crore.

The search operations were conducted at over 40 locations across Chennai, Villupuram, Puducherry, Coimbatore, and Hyderabad. The department stated that during the search operations, various damning documentaries and digital pieces of evidence were seized from the locations. Per the analysis of these pieces of evidence, the department accused the business conglomerate of engaging in large-scale tax evasion totalling over Rs. 400 crore by debiting non-genuine purchase invoices in the records of several enterprises.

These non-genuine purchase bills, the department further alleged, were obtained either from the company's regular material sources or through accommodation entry providers. The confiscated pieces of evidence also indicated that several payments made to material suppliers were returned in cash for making unauthorised investments among other purposes. 

So far, the search operation has resulted in the recovery of Rs 3 crore in undeclared cash and Rs 2.5 crore in unaccounted gold jewellery. The department stated that further investigations are in progress.

MGM is a Chennai-based industrial conglomerate that is primarily involved in the production of Indian-made foreign liquor (IMFL), as well as logistics, hotels, and entertainment. The firm is also revealed to be running its worldwide hotel chain's back-office activities from India.

(With inputs from Pramod Madhav)

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