IT seizes over Rs 6 crore in raids on Pista House, Shah Ghouse & Mehfil

Hyderabad: Hyderabad’s best-known biryani brands are now at the centre of a full-blown tax investigation, with Income Tax (IT) authorities seizing approximately Rs 6 crore in cash and flagging serious gaps between real sales and reported income at Pista House, Shah Ghouse, and the Mehfil group.

Coordinated searches by Income Tax Investigation Wing teams began on Tuesday morning, fanning out simultaneously to outlets, corporate offices, and the residences of owners and key executives linked to the three major restaurant chains: Pista House, Shah Ghouse, and Mehfil. Officials stated that more than 30–50 teams were deployed, covering roughly 20–30 locations across Hyderabad and Rangareddy. These locations included high-footfall dine-in branches as well as the backend administrative hubs of the three popular chains.

Sources close to the investigation have revealed that the operation has, so far, yielded about Rs 6 crore in unaccounted cash, recovered from various premises tied to the three brands. Of this substantial amount, around Rs 4 crore is understood to have been seized from premises linked to Shah Ghouse, while the remaining approximately Rs 2 crore came from locations associated with Pista House and Mehfil. This heavy cash component does not square with their declared books, indicating significant tax evasion.

Preliminary scrutiny by the IT teams points strongly to suppressed turnover. Investigators are currently engaged in a detailed comparison of branch-wise point-of-sale data, reports from online food aggregators, and collections from franchise fees against the income declared in tax returns. Officials are specifically examining whether daily cash sales were deliberately split or underreported, if parallel books were being maintained to conceal income, and if franchise and international revenues were routed through lesser-disclosed accounts to keep taxable income artificially low.

Given that these brands are heavily dependent on food delivery applications and various digital payment methods, IT teams have seized computers, POS servers, stock registers, and electronic accounting records. Their goal is to meticulously reconstruct the real volume of business transacted.

Investigators are particularly focusing on discrepancies found between settlement reports provided by food aggregators, revenue from QR-based collections, and the figures finally shown in the companies’ GST and income tax filings, especially those recorded during peak days and festive seasons.

Pista House, which began as a single outlet in Shalibanda in 1997 and now operates more than 40 stores across India, the Gulf, and North America, is under the scanner for allegedly concealing parts of its rapidly expanding franchise and export-driven turnover.

Investigators have been informed that franchisees reportedly paid several lakhs of Rs per outlet and that revenue from marquee products like Haleem and online orders ran into crores during the festive season, not all of which appears to have been fully disclosed to tax authorities.

Shah Ghouse, with its extremely busy outlets from Gachibowli to the Old City, is being probed for large volumes of unrecorded cash transactions and potential under-billing at its high-traffic biryani counters. Mehfil’s outlets and back office are also being combed for mismatches between dine-in, takeaway, and delivery sales and the relatively modest income the company reported. Investigators have seized both digital and paper ledgers for a forthcoming forensic audit.

The Income Tax department is now in the process of collating the seized cash, digital records, and property documents to precisely quantify the exact tax shortfall and determine what legal action will follow. This may include penalties, recovery proceedings, or even criminal prosecution under the Income Tax Act.

Although the department has not yet issued a detailed public statement, officials indicate that once preliminary assessments are complete, notices will be served, and the findings may well trigger wider scrutiny of other high-turnover restaurant brands operating predominantly in cash across the region.