The Income Tax Department has expanded its investigation into alleged large-scale tax evasion by major biryani restaurant chains in Hyderabad, turning its attention to their rice and meat suppliers. Officials say early checks indicate systematic manipulation of raw material weights to suppress income.

Over Monday and Tuesday, I-T teams inspected multiple suppliers linked to the chains under scrutiny — Pista House, Shah Ghouse and Mehfil — verifying purchase records and cross-checking supply data against the restaurants’ declared output. A supplier in AC Guards, Redhill, was among those examined.

Discrepancies in raw material records

Investigators found evidence that quantities of mutton were deliberately reduced on paper, while the associated cost was inflated to maintain output calculations. This mismatch is now central to determining the extent of income suppression.

Officials said the aim is to match three critical data points:

  1. Quantities dispatched by rice and meat suppliers
  2. Entries made in the restaurant chains’ books
  3. Actual sales recorded before deletion in billing systems

₹600 crore unaccounted income detected

The latest inspections follow a three-day search of the three biryani chains, during which the I-T Investigation Wing uncovered what it described as ₹600 crore in unaccounted income. At an estimated effective tax rate of 60%, the suspected evasion is around ₹360 crore.

Investigators also revealed that cash sales were routinely erased from billing systems. Prior to the raids, officials conducted decoy purchases using both cash and UPI across various outlets. These transactions helped establish a consistent pattern of bill deletion, supported by trails found in backend software systems in both Hyderabad and Ahmedabad.

Probe now entering deeper forensic phase

With the focus shifting to suppliers, officials say the investigation is moving into a more technical stage aimed at reconstructing the full supply-to-sale chain. The alleged manipulation of raw material weights, cost inflation, and deletion of cash transactions will form the backbone of the final assessment.