On January 29, the Income Department in Tamil Nadu descended upon over 70 branches and offices of retail giant Saravana stores in Chennai and Coimbatore. After 11 days of intensive searches and analysing financial records, sources in the IT Department confirm to TNM that the chain of stores has an undisclosed income of Rs. 420 crore.

A source involved in searches, told TNM on the condition of anonymity that, "In just the last three months they have hidden income to the tune of Rs. 35 crore. So we have calculated the same for a period of three years. Their sales per day comes upto Rs.1.2 crore."

In addition to this, unaccounted money to the tune of Rs. 25 crore, 12 kilograms of gold and 626 carats were also recovered from various loactions. While textile and jewellery showrooms were the focus in the Saravana stores raid, officials also searched properties associated to Lotus group and G Square, which are into realty business. There were helping Saravana acquire land across the state. The residence of Yogarathinam Pondurai, the son of the founder of Saravana stores, was also searched. He reportedly has interests in realty and other businesses.

How they cheated the system

According to a source in the IT department, the accounting software was rigged in outlets connected to Saravana stores.

"A company called Giri technologies was giving them the software," says the official. "The have prograamed the algorithm such that for every Rs.20 crore only Rs.10 crore was shown in the sales details. Infact they didn't even have accounts for before the last three months," he adds.

120 teams were involved in the searches across the state, with 800 officials specifically deputed for the operation.

"Based on the information we have got and materials seized a notice will be sent to the owners and they will be called for a hearing," says the official.