The Income Tax department's sweeping investigation into alleged large-scale tax evasion by popular Hyderabad biryani restaurant chains has now widened its net. After targeting the restaurants themselves, tax sleuths have turned their focus to the suppliers of rice and meat who provided raw materials to these eateries.
Probe Extends to Supply Chain
On Monday and Tuesday, I-T teams launched inspections at the premises of rice and mutton suppliers linked to the biryani chains accused of evading taxes. Officials are meticulously verifying purchase records and inspecting supply data to ascertain the actual quantities of raw materials delivered to the restaurants.
The core objective, as explained by investigators, is to conduct a three-way match. They are comparing the quantity of rice and meat dispatched by the suppliers, the quantity recorded in the restaurant chains' own books, and the actual sales captured in the billing systems before alleged deletions. This will help determine the exact extent of sales suppression.
Among the suppliers verified was one located in AC Guards, Redhill. The probe has uncovered a specific modus operandi: while the recorded weight of raw materials like mutton was deliberately reduced in the account books, the cost shown against it was inflated. This manipulation kept the final output calculations seemingly intact, masking the discrepancy.
Unearthing a Pattern of Deletion
This latest round of inspections is a direct follow-up to the intensive three-day searches conducted earlier on three major biryani chains: Pista House, Shah Ghouse, and Mehfil. During those raids, the I-T department's Hyderabad Investigation Wing stumbled upon what officials describe as massive tax evasion.
Sources indicate that searches at outlets and back-end software companies in Hyderabad and Ahmedabad conclusively established that cash sales were routinely and systematically deleted from the restaurant chains' billing systems. To map this pattern, investigators had carried out pre-raid decoy purchases using both cash and UPI at various branches before the operation.
The scale of the alleged evasion is staggering. Officials have pegged the unaccounted income suppressed from the books at a whopping ₹600 crore. Applying an effective tax rate of 60%, the suspected tax evasion alone amounts to approximately ₹360 crore.
Building a Complete Picture of Suppression
The investigation is now piecing together a comprehensive picture of the alleged financial fraud. The two-pronged strategy involved physical manipulation of raw material records and digital erasure of sales data.
By allegedly reducing raw material weights on paper and inflating their costs, the chains could underreport production. Simultaneously, the software-led deletion of cash sales from the system ensured a lower recorded revenue. The extension of the probe to suppliers is crucial to solidify the evidence chain from procurement to sale.
The I-T department continues to scrutinize these layers of data to calculate the total money involved in the alleged manipulation and build a watertight case.
