Income Tax Raids on Ghee Manufacturers Uncover Nearly ₹700 Crore in Unaccounted Transactions

A marathon 131-hour search operation carried out by the Investigation Wing of the Income Tax Department on five major ghee manufacturing groups in Uttar Pradesh and Rajasthan has led to the detection of unaccounted financial transactions amounting to nearly ₹700 crore, officials said on Tuesday.

The extensive action, which commenced early Thursday morning and concluded on Tuesday evening, was launched based on intelligence inputs pointing towards large-scale tax evasion and adulteration practices. The operation targeted the Bhole Baba, Dauji, Poddar, Malani and Bikaner groups.

Searches Conducted Across 35 Premises

According to officials, the Agra-based Investigation Wing covered more than 35 premises spread across multiple states. These included locations in Delhi, Agra, Dholpur, Kanpur Dehat, Aligarh, Sirsaganj, Dausa, Bikaner and Jodhpur. Over 200 income tax officials and supporting staff participated in the coordinated operation.

A large volume of documents, digital data and loose papers were seized during the searches. Authorities stated that the scrutiny of the seized material is underway and the investigation is expected to continue over the coming weeks.

Cash, Jewellery and Bank Lockers Identified

During the course of the operation, unaccounted cash amounting to ₹5 crore was recovered, which was not recorded in the books of accounts of the entities concerned. Additionally, jewellery valued at over ₹18 crore was found, with quantities exceeding permissible limits seized by the department.

Investigators also identified 16 bank lockers linked to the groups. Prohibitory orders have been issued under the Income Tax Act, and the lockers are expected to be opened shortly. Officials indicated that further recovery of cash, jewellery and incriminating documents is likely.

Bogus Billing and Hawala Links Suspected

The search action revealed multiple instances where purchases and sales were allegedly shown only on paper without any actual movement of goods. Such transactions are suspected to be bogus in nature and aimed at manipulating financial records, including claims related to input tax credit.

Among the seized material was a slip believed to be connected to hawala transactions. Officials also found evidence of undisclosed foreign investments, including investments in Uganda. Several expenditure entries were detected that had been kept outside the formal accounting framework.

Land Investments Under Examination

The investigation has further brought to light large-scale investments in land. Documents seized indicate numerous property registrations carried out between 2019 and 2025. Authorities are examining the extent of cash components involved in these transactions, along with other high-value investments made under various heads.

Based on the final determination of undisclosed income, the Income Tax Department is expected to initiate assessment proceedings, along with applicable penalties under the law.

Ghee Adulteration Raises Public Health Concerns

The searches also uncovered instances of ghee adulteration at manufacturing units located in Dausa and Sirsaganj. Samples collected from the Dausa facility were tested at a Delhi-based FSSAI laboratory and were found to be adulterated. Similar violations were detected during production at the Sirsaganj unit.

Information pertaining to the adulteration has been shared with the Food Safety Department for further action. Officials noted that adulteration significantly lowered production costs, while expenses were recorded as if pure ghee was being manufactured—resulting in inflated profits and corresponding tax evasion.

Inter-Agency Probe to Follow

In the aftermath of the searches, the Income Tax Investigation Wing is preparing to widen the probe through inter-agency coordination. The Central Board of Direct Taxes (CBDT) is expected to facilitate intelligence-sharing with other enforcement and regulatory bodies.

Officials stated that the operation is being viewed as a strong enforcement action against entities allegedly involved in tax evasion and practices that pose serious risks to public health. Further action will follow upon detailed examination of the seized material.