Under the lens CBDT downplays search and seize operations `No search conducted on any sharebroker' MCX promoted by Financial Technologies
The Income-Tax Department on Tuesday conducted search and seizure operations on the Multi Commodity Exchange (MCX) and the offices of its promoters, branches and associates across the country.
The Central Board of Direct Taxes (CBDT) confirmed this in a statement.
"We are verifying some records," said a senior Income-Tax Department official.
He, however, refused to reveal the reasons behind the raid.
The CBDT statement was also at pains to emphasise that the searches did not involve any stock-broking entities.
Sections of media started reporting in the morning that apart from a commodity exchange, even sharebrokers of stock exchanges were being searched.
"This is not true; there has been no search on any sharebroker connected with a stock exchange per se," said the statement.
It added that surveys were being conducted on the exchange and its branches at Ahmedabad, Bangalore, Chennai, Delhi and Kolkata.
However, interpreting the incident as "routine," an official statement from the Multi Commodity Exchange said: "The Income-Tax Department today carried out routine investigation at the Multi Commodity Exchange of India at its offices in Mumbai."
It added: "The exchange officials have said that they have complied with all rules and regulations and all laws of the land."
There was no impact on trading or volumes of the exchange, which were normal, said a broker-member of the exchange.
Another broker, however, said: "Such I-T raids on exchanges create a fear psychosis among traders as they deal in crores of rupees. The raid comes close on the heels (of) the exchange (seeking) trade details for the last quarter from us."
The promoter of MCX is Financial Technologies Ltd.
Both entities are headed by Mr Jignesh Shah.
Search and seizure of such nature is conducted when the Income-Tax authorities have reason to believe that an assessee is in possession of money or valuable articles, which has been either wholly or partly not disclosed for tax purposes.
When such information pertains to a year for which the assessment has already been completed, a search under the relevant provisions of the law is the only option available, an Income-Tax official explained.