UPDATE 2-Police seize assets in Italy fashion group tax probe

(Adds comment from Matteo Marzotto)

MILAN, Nov 5 (Reuters) - Italian police have seized assets

worth 65 million euros ($83.5 million) in a tax probe involving

the 5.3 billion euro sale of fashion houses Hugo Boss and

Valentino in 2007.

Italy's tax police said on Monday they had confiscated real

estate, land and corporate holdings of 13 people "linked to one

of Italy's most important families in the fashion and textile

sector."

A person familiar with the investigation told Reuters the 13

people in question were linked to the Marzotto group, and

included members of the Marzotto family.

Marzotto sold Valentino Fashion Group - then including both

the Valentino label and Hugo Boss - to private finance group

Permira in 2007.

Those under investigation are suspected of not having filed

tax returns.

The Italian government has set fighting chronic tax evasion

as one of its priorities as it seeks to come to grips with the

country's towering debt crisis and find resources to fund

growth.

Lawyers representing the Marzotto family said the decision

taken by Milan prosecutors ordering the seizure was "totally

groundless".

The lawyers said bank documents showed capital gains from

the operation had been declared and taxed.

"I acknowledge the seizure measures. I think it right only

to point out that I did not have any operative position in the

company in which I was minority partner," Matteo Marzotto, a

board member of the textile family group, said in a statement.

The technocrat government of Prime Minister Mario Monti has

described the fight against tax evasion as a state of war and

has stepped up monitoring and collection efforts.

Earlier this year the head of Italy's Inland Revenue

service, Attilio Befera, said tax evasion totalled some 120

billion euros.

A spokesperson for the Marzotto Group declined to comment,

saying the news did not involve the company or any of its units.

Police said in a statement the probe revealed that a

Luxembourg-based holding company used by the Marzotto Group in

the sale made a capital gain of nearly 200 million euros,

resulting in tax evasion of 65 million euros.

"The investigation... revealed that a financial holding

company purposefully created in Luxembourg was instead

administered from Italy," the police said.

($1 = 0.7785 euros)

(Reporting by Sara Rossi, Stephen Jewkes and Antonella Ciancio;

editing by Patrick Graham and David Cowell)