I-T search fetches Rs 19.3 crore cash from stock trader’s residence in Gujarat

AHMEDABAD: In one of the biggest cash hauls from a search operation for the Income Tax (I-T) Department in Gujarat in the recent times, search at a Paldi residence fetched a total of Rs 19.3 crore in denominations of Rs 2000, Rs 500 and Rs 100.
I-T department sleuths carried out search and survey at six locations in Ahmedabad after questioning Jignesh Shah, a resident of Parshwa Apartment in Paldi, and Sanjay Shah, a resident of Prernatirth Bungalows in Satellite.The cash was found from the residence of Jignesh Shah.
“There were no cavities made in the residence but the cash was found from bedrooms of the apartment where it was stacked everywhere - from cupboards to cabinets. It took over five hours for the multiple teams of bank officials who were called upon the spot to help the team,” said a senior I-T department official.
The officials said that the two stock traders - identified as ‘entry providers’ in colloquial market lingo - are not related. However, what they did was very much similar. “They used to provide ‘profit’ or ‘loss’ on demand to individuals and firms to show on their stock trading. They used to deal in penny stocks in shell companies. For example, they can provide the entries of purchase of a share not listed on exchange at Re 1 a decade ago and then inflate its price to Rs 100 and then can show it crashing at Rs 20 - showing notional loss of Rs 80 per share. Number of such shares can run into thousands,” said an official, adding that the proceeds could have also been used to adjust long-term capital gains (LTCG) to reduce tax burden.
Likewise, the notional profit can be obtained if the individuals or firms want to improve their liquid assets in books of accounts. I-T officials said that they have found 18 demat accounts belonging to the duo till Tuesday evening.