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Income Tax Department conducts search operations on BSE stock brokers, traders at 39 locations

Income Tax Department conducts search operations on BSE stock brokers, traders at 39 locations

Income Tax Department conducts search operations on BSE stock brokers, traders at 39 locations
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By CNBC-TV18 Dec 9, 2019 6:36:27 AM IST (Updated)

The Income Tax Department has detected alleged unaccounted income of Rs 1.30 crore after it raided certain share-brokers/traders.

The Income Tax Department has detected alleged unaccounted income of Rs 1.30 crore after it raided 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 Currency Derivative Segment on Bombay Stock Exchange (BSE).

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The searches were carried out on December 3 at over 39 locations spread across Mumbai, Kolkata, Kanpur, Delhi, Noida, Gurugram, Hyderabad and Ghaziabad.
“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, the unscrupulous entities have secured desired profits/losses, which is estimated to be more than Rs 3,500 crore," the statement said.
"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 utilized by the beneficiaries aggregate to around Rs 2,000 crore," it said.
"The number of beneficiaries who have been benefitted 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," the statement added.
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