NEW DELHI: The Income Tax Department has conducted a search and seizure operation in Tamil Nadu and detected an undisclosed income of Rs 700 crore, according to an official statement.The search was launched early on Tuesday at 55 premises in various places of the state, including Chennai, Coimbatore, Thanjavur, and also in Kerala, Andhra Pradesh and Goa."The Income Tax Department conducted a search and seizure operation on August 6, 2019 in the case of one of the major producers of beer and IMFL (Indian-made foreign liquor) in Tamil Nadu," the Union Finance Ministry said in a statement.The premises included residences of the promoters, key employees and some of the suppliers of materials, it said.According to the statement, the search was based on intelligence gathered over several months that the business group was indulging in large-scale tax evasion by inflating its expenditure on materials used in its production processes.During the search, the teams found "telltale evidence" of the modus operandi that involved over-invoicing of purchase of raw materials and bottles, which constituted a major portion of the cost of production, the statement said.The suppliers received payment at the inflated value by cheque or RTGS, but paid back the excess value in cash to key confidante employees of the group.The search teams gathered evidence of such over-invoicing and return of cash by suppliers. Such inflation by over-invoicing amounted to suppression of taxable income of almost Rs 400 crore over a period of six years, it said.The search also resulted in unearthing of evidence of similar tax evasion by another leading business group in the same liquor industry. Consequently, the department launched a search operation in the case of the second group on Friday, the statement said.About seven premises of this group at Chennai and Karaikal were covered in the second phase of the search operation. The search is still in progress and the suppression of taxable income detected in this group has been estimated to be about Rs 300 crore, it said.Acting on a tip-off, the tax officers tracked down employees moving with unaccounted cash, intercepted them and recovered Rs 4.5 crore cash from the car in which they had concealed it, the statement said.The search has so far resulted in detection of undisclosed income of Rs 700 crore, it added.