Rs 70k crore tax evasion probe: Madurai to Shimla — raids at over 70 restaurants over ‘vanishing bill’

Pan-India I-T survey targets 70 restaurants in tax evasion probe

HYDERABAD: The income tax (I-T) investigation wing on Sunday launched a pan-India survey of around 70 restaurants as part of a follow-up to the Rs 70,000 crore sales suppression probe linked to billing software manipulation to evade tax. The states included Andhra Pradesh, Delhi, Maharashtra, Karnataka, Gujarat among others.The 70 restaurants were spread across nearly 45 cities from Madurai to Shimla and Godhra to Guwahati, including New Delhi and Mumbai. All these restaurants were suspected to be linked to sales suppression amounting to around Rs 700 crore in the present survey.In AP, surveys were carried out in Rajahmundry, Nellore and Visakhapatnam.

Other cities included Mumbai, Thane, Pune and Amravati in Maharashtra; Gurugram in Haryana; Noida, Hapur, Ghaziabad and Lucknow in Uttar Pradesh; and Chennai, Coimbatore and Madurai in Tamil Nadu.Survey teams also visited restaurants in Godhra, Dahod, Rajkot and Ahmedabad in Gujarat; Goa; Bengaluru in Karnataka; Indore and Bhopal in Madhya Pradesh; Korba in Chhattisgarh; Samalkha in Haryana; Shimla in Himachal Pradesh; Jalandhar, Amritsar and Ludhiana in Punjab; Puri, Cuttack and Bhubaneswar in Odisha; Jaipur and Ajmer in Rajasthan; Malappuram and Kozhikode in Kerala; Kolkata and Siliguri in West Bengal; Guwahati in Assam; Patna and Saran in Bihar; and Koderma in Jharkhand.The exercise was carried out under the directions of the Central Board of Direct Taxes as per Section 133A of the Income Tax Act.

Billing software under scannerThe nationwide action followed an earlier crackdown in Telangana where detailed inspections and surveys were conducted in about 40 restaurants, with suspected evasion estimated at over Rs 490 crore. Officials said the present exercise is part of a broader investigation into manipulation of restaurant billing software.According to I-T and CBDT sources, Hyderabad was among the first locations where investigators began examining the issue. The Hyderabad income tax investigation unit initially conducted searches on a chain of biryani restaurants and later analysed several establishments, uncovering different methods used to suppress revenue.Restaurants maintain billing software to prevent internal manipulation by waiters, cashiers or managers, with all sales — through card, UPI or cash — recorded in the system.Investigators found that in some cases, certain cash transactions were allegedly deleted from the software at the end of the month to reduce declared income and avoid income tax and GST payments. Only a portion of the cash entries was retained in the system, while the rest were removed.Another method detected during the probe involved declaring only a limited percentage of revenue in I-T returns without deleting entries, assuming that inspections would not take place.Investigators gained access to terabytes of data at a software company in Ahmedabad. The data was analysed for hours in the digital forensic and analytics laboratory of the Hyderabad I-T unit at Aayakar Bhavan. Based on this analysis, officials identified patterns indicating possible suppression of sales in several establishments, the I-T and CBDT sources said.