Income Tax Department conducts search & survey operations on Share Brokers/Traders across India

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Income Tax Department conducts search & survey operations on Share Brokers/Traders across India

Income Tax department raids stock brokers…

income tax raid

On 3rd December 2019, the Income Tax Department carried out search and survey operations on certain share-brokers/traders who were involved in facilitating the accommodation of profits/loss through reversal trades in illiquid stock options in Equity Derivative Segment and also Currency Derivative Segment on Bombay Stock Exchange (BSE). Over 39 locations spread across Mumbai, Kolkata, Kanpur, Delhi, NOIDA, Gurugram, Hyderabad, and Ghaziabad were covered.

The search/survey action has unraveled 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, the unscrupulous entities have secured desired profits/losses, which is estimated to be more than Rs. 3500 Crore. The search/survey action has also resulted in the identification of the wrongful long-term capital gains taken in at least 3 penny stocks listed on the BSE, where the manipulated profits utilized by the beneficiaries aggregate to around Rs. 2000 Crore.

Income Tax Department conducts search & survey operations on Share Brokers/Traders across India

The search action has resulted in the seizure of unaccounted cash of Rs. 1.20 Crore. The number of beneficiaries who have been benefited by these manipulated transactions could be to the tune of a few thousand 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.

Source: Press Information Bureau Government of India (Ministry of Finance)

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