New Delhi, Aug 11 (IANS): In a major swoop against tax dodgers, the Income Tax Department has unearthed a network of benami petrol pumps in Meghalaya.

Besides indulging in massive evasion of income tax, the persons controlling the petrol pumps have been found to be misusing section 10(26) of the Income Tax Act, 1961 meant for local tribals.

During the search operations, the tax department found incriminating documents besides cash hidden at most unlikely place -- water tank!

"This search by the department was a much-needed action on a long existing racket run by some unscrupulous elements exploiting local citizens of Meghalaya and avoiding paying income tax using tribal persons who are exempt from income tax, as a front," the I-T department said in a statement.

The pre-search investigation involved extensive surveillance and covert enquiries lasting almost a year.

In a separate search operations in Tamil Nadu, the I-T department has found two business groups to have suppressed their taxable income to the tune of Rs 700 crore by over-invoicing expenses.

Moving swiftly in one of the two cases, the department carried out search at 55 premises in various places in Tamil Nadu including Chennai, Coimbatore and Thanjavur, among others and also in Kerala, Andhra Pradesh and Goa.

The premises included residences of the promoters, key employees and some of the suppliers of materials.

In case of another group, engaged in liquor business, about seven premises were covered at Chennai and Karaikal in the search.

"The search is still in progress and the suppression of taxable income detected in this group has been estimated to be about Rs 300 crore," the department said.