In a search and survey operation spread across 39 locations against stock brokers/traders for generating artificial profits/losses through illiquid stock options in equity and derivatives markets, the Income-tax Department has seized unaccounted cash worth Rs 1.20 crore.
The Department in a statement on Saturday said it estimated the trade in illiquid stock options by such stock brokers/traders to have resulted in artificial losses/profits to the tune of Rs 3,500 crore by executing reversal trades within a very short span of time.
The Income-tax department has also identified at least three penny stocks listed on the BSE, where “the manipulated profits utilised by the beneficiaries aggregate to around Rs 2,000 crore”.
“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 tax department said.
The Income-tax Department has carried out search operations on certain share-brokers and traders for allegedly executing fraudulent trades in illiquid stock options.
Over 39 locations spread across Mumbai, Kolkata, Kanpur, Delhi, Noida, Gurugram, Hyderabad and Ghaziabad were covered under the operation last week, it said.
The search or survey action has unravelled the entire modus-operandi which has been adopted by the share-brokers and traders to trade into the illiquid stock options.
“By this contrived methodology, the unscrupulous entities have 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 taken 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,” it said.