DEMONETISATION: I-T DEPT CLAMPS DOWN ON JEWELLERS
Aday after demonetisation of ~500 and ~1,000 notes, the Income Tax (I-T) department on Thursday conducted surveys on jewellers and suspected hawala operators across Mumbai, Delhi and parts of Punjab.
There have been reports of illegal profiteering by discounting of money, sale of gold at up to 60 per cent premium, and sale of jewellery for over ~2 lakh without PAN details.
“We are keeping a watch on illegal transactions. I can only say that legal and honest taxpayers have nothing to worry about,” Satish Chandra, chairperson, Central Board of Direct Taxes (CBDT) told Business Standard, but did not specify details of survey operations.
Revenue Secretary Hasmukh Adhia clarified that only surveys have been conducted by the tax department and not raids as feared earlier in the day.
Raids are used in common parlance, but in the tax lexicon there is no such expression. It is either search or a survey. While in search, any premises of the assessee — residence, shops, offices or any other place can be entered; in survey only shops, factories and godowns can be entered. There are other differences as well.
The surveys by the tax department were aimed at plugging loopholes being exploited by several black money holders to get rid of scrapped notes. These were conducted by taxmen in several parts of Delhi, mainly Karol Bagh, Dariba Kalan, Chandni Chowk and Zaveri Bazar in Mumbai.
There have been reports of discounting of money in these areas. “Surveys are being carried out based on the information that we have got. Many are converting old currency notes of ~1,000 for lesser value of ~400 or ~500,” said a source who did not wish to be identified. Besides, gold was allegedly being sold by jewellers on backdated bills at up to ~55,000 per 10 grams as against the market price of around ~31,000. “We are verifying the information that jewellers are selling gold at a much higher price. Many are in fact selling gold and jewellery for over ~2 lakh without PAN card details. We are acting on a lot of information we have in hand,” said the source.
Also, hawala operators are offering foreign currency in exchange of old notes at up to ~125 a dollar, as against the exchange rate value of ~67. Surendra Mehta, secretary, India Bullion and Jewellers Association (IBJA) said, “I-T raids were conducted on a few jewellers to check certain malpractices that took place after the demonetisation.” While most of Zaveri Bazaar in Mumbai was closed on Thursday, shops opened for business in the evening. “There is no business at all. Normally, jewellery is purchased with surplus cash which has vanished suddenly from the market. We expect this sentiment to continue at least for the next six months, till the entire trade is transformed completely from cash to cashless. The entire wedding season is going to prove lacklustre this year,” said Kumar Jain, director, Umedmal Tilokchand Zaveri, a bullion dealer and jewellery retailer in Zaveri Bazaar.
Besides jewellers, I-T officials also raided moneychangers who were exchanging old notes for bundles of ~100, or for new notes.
These surveys were also conducted in cities like Ludhiana, Chandigarh and Jalandhar.