IT Dept Identifies ₹70K Cr Scam in Hotel Bills Using AI?

The evolution of the AI advancement in multiple sectors is becoming increasingly prevalent by the day. It has now reached a point where even the income tax department has started to use AI to scale the data and identify financial frauds happening in the country.

Going into the story, the Hyderabad wing of the IT department analysed tons of data from the bills software used by 1.7 lakh restaurants in India and a massive financial fraud has been identified. 

By analyzing 60 TB of transactional data from a pan-India billing software used by over 100,000 restaurants, the Income Tax Department’s Hyderabad investigation unit revealed that these eateries had suppressed sales turnover worth at least ₹70,000 crore since FY 2019-20.

The probe, using AI and big data on six years of records showing ₹2.43 lakh crore in total billing, flagged patterns across states with Karnataka, Telangana, and Tamil Nadu leading deletions.

Across this period, the software recorded total billing of about ₹2.43 lakh crore. Within this, investigators identified ₹13,317 crore classified as post-billing deletions. Officials said the pattern of deletions and edits indicated that the restaurants were reporting their order sizes and hiding revenue under the IT radar. 

In Andhra Pradesh and Telangana, analysis of 3,734 PAN Cards showed sales underreporting of ₹5,141 crore over five years when compared with income tax returns.

Karnataka logged the highest deletion figures at about ₹2,000 crore, followed by Telangana at ₹1,500 crore and Tamil Nadu at ₹1,200 crore. The top five states where evasion was detected include Tamil Nadu, Karnataka, Telangana, Maharashtra and Gujarat.

This could lead to serious consequences from the IT department in the near future as several restaurants across the country, including those in Hyderabad could be facing the music.