(I-T) Deptt. conducts search & survey operations on Share Brokers at 35 locations

Speed Post News Network

New Delhi : The Income-Tax (I-T) Department on December 3, 2019, carried out search and survey operations on certain share-brokers/traders involved in facilitating accommodation of profits/loss through reversal trades in illiquid stock ( stocks which can’t be sold easily) 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 under the operations.

The search/survey action has unravelled the entire modus-operandi adopted by the share-brokers/traders to trade into the illiquid stock options in Equity Derivative Segment and generate artificial losses/profit by executing reversal trades in a very short span of time.

By this contrived methodology, the unscrupulous entities had secured desired profits/losses, which is estimated to be more than Rs 3,500 crore. The search/survey action has also resulted into identification of the wrongful long-term capital gains made in at least 3 penny stocks listed on the BSE, where the manipulated profits utilised by the beneficiaries aggregate to around Rs 2,000 crore, according to a PIB release.

The search action has resulted into seizure of unaccounted cash of Rs. 1.20 crore. The number of beneficiaries 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.