I-T suspects massive concealment of profits by Madhucon

Concealment of profits is said to be the reason for undertaking massive raids and search operations by income tax department on 35 offices of Madhucon group.

The 'incriminating material' seized is so voluminous that it would take some time to sift through it to ascertain the extent of tax evasion, I-T department sources told Business Standard. According to sources, a substantial number of lockers was also seized.

The raids assume significance as it is the first massive raid in recent times on an infrastructure company based in Hyderabad.

"Considering the size of the business being handled and other related aspects of Madhucon's operations, the department was fully convinced that the profits shown by it were not realistic," an official said.

The department is also looking into the transactions of a financial consortium that was formed to fund the projects undertaken by Madhucon. The department also searched the premises of Telugu film actor Venu, who is one of the directors of the company.

Usually, the companies in infrastructure activity give sub-contracts to other players to execute work awarded to them. A lot of black money is being generated during the course of awarding subcontracts in certain cases and this money is being pocketed by the persons who got the original contract, I-T sources said.