The I-T raids on bullion dealer Prithviraj Kothari have opened can of worms in the city’s bullion market.
At least 20 other dealers, jewellers and brokers in Zaveri Bazar, Opera House and Dagina Bazar areas are now under income tax (I-T) department’s scanner for dealing in unaccounted for cash.
In the past two days, I-T authorities conducted raids on another prominent bullion dealer in Opera House and a jeweller near Zaveri Bazar after receiving information about them dealing in cash. Sources in the department said the latter had business links with Kothari till a few years ago and used to import gold through him.
“Many other dealers and brokers are under our scanner," said an I-T official, requesting anonymity. Some of these have or had business links with Kothari, he added.
Officials said that they were led to many other bullion dealers after scrutinising documents recovered from the raids on the various premises of RiddiSiddhi Bullions Ltd, which Kothari owns.
“There are some who dealt in bullion and cash, which were not accounted for, only for Kothari,” the official said, adding that these people did not have the income to match the huge amounts of cash and bullion they were dealing in.
During investigations, authorities also found that many dealers do not show part of the amount earned through bullion sales in their account books. “A 2.5-gram gold coin sold is shown as 1-gram coin in their account books. By doing this, dealers save tax to the tune of Rs4,000,” the official said.
Officials also found that many bullion dealers and jewelers often procure bogus bills, a racket that is common in Zaveri Bazar, Opera House and the Andheri MIDC areas.
Bullion dealers and jewellers have been found to be taking bogus bills for both showing imports or purchase and sale. “By showing imports or purchase, they inflate expenditure and bring down profit in their books of account. This helps them evade tax,” the official said.
By showing sale, many of them convert black money into white, as they pay tax on that amount, he added.
“Actually there is no physical buying or selling of bullion or jewellery. They are present only on paper and accounts are manipulated with the help of bogus bills, which are issued on a commission of .5% to 3% of the amount, depending on the market conditions,” the official said.