The Income Tax (I-T) Department has reportedly detected over Rs 650 crore of undisclosed income from the largest coffee retail chain in India -- Cafe Coffee Day (CCD). The statement comes after the department's raids at several CCD offices last week.
Coffee Day Enterprises Ltd is owned by VG Siddhartha, the son-in-law of former External Affairs Minister and former Karnataka Chief Minister SM Krishna.
"The detection of undisclosed income is expected to be much higher since there are a number of other issues, including violations of other statutes on which there is no disclosure, but relevant evidence has been found. These will be pursued effectively with vigour, energy and imagination," the department said.
On Thursday, taxmen had started conducting raids at several CCD offices and headquarters in Bengaluru. Immediately, the shares of Coffee Day Enterprises Ltd had also tumbled on the Bombay Stock Exchange (BSE).
The stock closed 3.35 percent down at Rs 233.80, recouping part of its loss after slumping over seven percent in intra-day trading. The benchmark Sensex fell 0.1 percent to 32,370.04 points.
The raids were conducted under the direction and supervision of the I-T Department's investigation cell director – General BR Balakrishnan.
According to reports, raids were conducted at multiple locations, including Siddhartha's offices at Coffee Day Square in Bengaluru's Lavelle Road and his residence in Sadashivanagar. Premises in other cities such as Hassan, Chikkamagaluru, Chennai and Mumbai were also raided.
The move is also likely to spur a political storm with Congress accusing the Bharatiya Janata Party (BJP)-led central government of misusing agencies to target political opponents. SM Krishna had left Congress in January to join BJP.
Siddhartha had opened CCD's first outlet on Bangalore's upscale Brigade Road in 1996. The company's first launch came at a time when Bangalore was transforming into an Information Technology hub.
CCD was among the top six global coffee retail chains till 2011 and the largest in India. As of March 2015, the company had 1,530 outlets across 29 states in the country. It also has outlets in countries like Austria, Czech Republic and Malaysia.
