"The Department conducted discreet inquiries for more than three months before the search and identified the modus operandi and the key players," read a statement issued from the Income Tax Department on Sunday.
During the raids, evidence of unaccounted professional receipts by artists, cash investments in properties and jewellery through unaccounted income have been found.
"Evidence relating to suppression of income from sale of audio, digital and satellite rights, unaccounted cash receipts from distributors, and of expenses from undisclosed and unaccounted sources were also recovered during the raids," I-T Department further stated in the statement.
"Some of the evidence found like diversion of cash collected by theatres will be of interest to other revenue and enforcement agencies and will be duly shared with them. In accordance with the normal process of the Investigation Wing will be launching some prosecution cases for tax evasion at a very early date," the statement said.
The I-T Department has requested the Kannada entertainment industry to maintain proper records of their revenue and taxes. "The Income Tax Department requests the entertainment industry in Karnataka to follow laid down accounting standards by recording all transactions in books of accounts and pay due taxes," said the I-T Dept in the statement.