The Income Tax (IT) Department has found undisclosed income and instances of fund diversion by a group of trusts that runs educational institutions in and around Chennai after a search action last week, an official statement said on Monday.
"The preliminary estimate of the undisclosed income of the group detected so far is more than Rs 350 crore," a statement by the Central Board of Direct Taxes (CBDT) said.
The statement, however, did not mention the group's name.
The search carried out across 32 premises in and around the Tamil Nadu capital found evidence of suppression of fee receipts and revealed that a group entity had adopted the modus operandi of showing the actual fees received as 'advance fee collection' in the liability side of the balance sheet and advancing the said amounts as payments, mainly, to its sister concerns against certain expenses or purchases, which were found to be inflated or bogus.
"Thus, the money of the trusts is found to be diverted outside the trusts for the objects outside the scope of the trust," it said. Further, evidences have been found of unexplained cash debits, unrecorded cash expenditure, suppression of sale receipts in fishing harbour, loans advanced in cash, non-disclosure of income from sale of property and so on.
Cash of approximately Rs 5 crore and jewellery of more than about Rs 3 crore was seized in the action. The search proceedings have been temporarily concluded and investigations into the findings are in progress, the CBDT said.
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