The income tax department on Saturday conducted raids at 39 locations across Delhi, Noida, Gurugram, Ghaziabad, Mumbai, Kolkata, Kanpur and Hyderabad and unearthed irregularities involving involving more than Rs 5,500 crore. The raids also yielded unaccounted cash to the tune of Rs 1.2 crore, the finance ministry said in a statement.
“The Income Tax Department carried out search and survey operations on certain share-brokers/traders,” the statement said. These share brokers and traders were involved in facilitating accommodation of profits/loss through trade in illiquid stock options in equity derivatives and currency derivative on Bombay Stock Exchange.
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The searches unearthed illegal practices adopted by the share-brokers and traders to transact in illiquid stock options, generating artificial losses/profit through reversal trades. These entities secured illegal gains of more than Rs 3,500 crore. The IT department has also identified wrongful long-term capital gains to the tune of Rs 2,000 crore taken in 3 penny stocks listed on the BSE.
The searches will also help identify the beneficiaries of these manipulated transactions across the nation, which could run into a few thousands, and the corresponding quantum of income tax evasion. The department is in the process of examining the incriminating evidence recovered during the raids to determine violation of direct tax laws.