They said the raids are being conducted against at least 11 contractors in Mysore and Bangalore by the investigation wing of the department.
These contractors are linked to public works jobs rendered by them on government tenders, they said.
The department had last week said, has that it has gathered details of all contract payments made in the last quarter of the completed financial year in the state and is making a comparison with previous years for identifying abnormal cases.
This data is being co-related with all bank transactions and available cash withdrawal intelligence, it had said.
It had said that as part of the enhanced alertness in the wake of the single-phase polling scheduled on May 12, the investigation wing of the department in Karnataka and Goa has stepped up its surveillance and monitoring activities .
In an instance unearthed recently, the department claimed a contractor in one of the districts of the state was searched and it was found that he had made payments to another person who in turn had withdrawn cash from the amount transferred .
The counting of the votes for the 224-member Assembly is scheduled on May 15.
The EC has appointed a number of election expenditure observers in Karnataka, apart from other central observers, to keep a check on black money and illegal inducements used to bribe voters.
It had said that Rs 2,000 and 500 notes constitute 97 per cent of the Rs 4.13 crore cash that the tax sleuths have seized in poll-bound Karnataka till now.
The revelation came in the backdrop of a cash crunch being witnessed across various regions in the country as a number of ATMs had gone dry.
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