I-T Dept conducts search operations on share brokers/traders nationwide
09 December 2019
The Income Tax Department last week carried out search and survey operations on certain share-brokers/traders who were involved in facilitating accommodation of profits/loss through reversal trades in illiquid stock options in equity derivative segment and also the currency derivative segment on Bombay Stock Exchange (BSE).
The search and survey operations covered over 39 locations spread across Mumbai, Kolkata, Kanpur, Delhi, NOIDA, Gurugram, Hyderabad and Ghaziabad, says a finance ministry release.
The search/survey action has unravelled the entire modus-operandi which has been adopted by the share-brokers/traders to trade into the illiquid stock options in equity derivative segment and thereby generate artificial losses/profit by executing reversal trades in a very short span of time. By this contrived methodology, unscrupulous entities have secured desired profits/losses, which is estimated to be more than Rs3,500 crore.
The search/survey action has also resulted into identification of the wrongful long-term capital gains taken in at least 3 penny stocks listed on the BSE, where the manipulated profits utilised by the beneficiaries aggregate to around Rs2,000 crore.
The search action has resulted into seizure of unaccounted cash of Rs1.20 crore. The number of beneficiaries who have been benefited by these manipulated transactions could be to the tune of a few thousands scattered across India and efforts are being made to identify them as also the corresponding quantum of income evaded. Incriminating evidence recovered during the course of actions is also being examined for determination of contravention of the various direct tax laws, the release added.