I-T men find Rs. 320 crore evasion by tobacco firm

Even as health officials were searching several shops across the city and seizing tobacco products in the wake of a schoolboy falling sick after taking intoxicant-laced chocolate, the Income Tax officials on Friday conducted raids on two godowns of a tobacco products company at Red Hills and seized cash and documents from the godowns.

I-T sources told DTNext that the company had been supplying tobacco products across the four South Indian states and suspected to have evaded tax to the tune of over Rs 320 crore. Unconfirmed reports said that the company was owned by a close relative of a highly influential person in the state. Tonnes of tobacco products, which were banned in many states, were stocked up in the two godowns to be distributed to four southern states. 

A team of 20 I-T officials started the raids at the godowns and at the residences of the company’s promoters in various places in the city from 8 am. The team was continuing its searches till late in the evening. “This is a completely unorganised segment. We had carried out a survey of the operations and activities of this company and detected largescale tax evasion. Subsequently, the godowns and the residences were raided where we found cash and banned tobacco products. However, we are waiting for more details to find out the exact amount of tax evasion by the company and its promoters,” a senior I-T official said. 

Sources said that the products, which have been banned in Tamil Nadu, were stored and marketed clandestinely across the four states and the proceeds from the sales were never properly accounted. Only the sale volume of non-tobacco products was accounted and even those accounts were fudged to evade tax, said sources. I-T officials had interrogated Rajendran, manager of the company, residing at Anna Nagar in Chennai, over the seizures that were made at the godowns.

I-T officials said further action on the company would be decided after the scrutiny of the seized documents. The original extent of tax evasion could be ascertained only after the scrutiny, officials added.