Amid nationwide ‘surveys and searches’ by the Income Tax department in Delhi, Mumbai and parts of Punjab on Thursday to crack down on malpractices, reports of a raid in Chandni Chowk, Karol Bagh and Gandhi Nagar led to panic among traders.
As soon the news spread, many traders closed their shops as early as 4 pm. I-T sources later confirmed searches were conducted on jewellers in Karol Bagh and old Delhi’s Dariba Kalan .
Other markets in the city also shut down early.
“Around 15 officials came to the shop around 6.30 pm. They are checking the accounts of November 8 and 9 when the announcement was made by the prime minister. Stocks are being matched with sales. We were about to leave when tax officials reached. Apart from the owner, cashier, accountant, and other staff are still inside,” said a worker at a jeweller shop in Dariba Kalan.
After Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes, there were rumours that certain jewellers and traders accepted old notes to sell gold at higher prices.
Old Delhi has at least 300 traders dealing in gold and silver, who are estimated to do a business of Rs 500-700 crore per day. The searches were on till late on Thursday evening.
The impact was seen at other markets of the Walled City too. Though shops remain open till 8 pm on a usual day, dealers in Khari Baoli, Chawri Bazaar, and Dariba had left by late afternoon.
Sanjay Bhargava, general secretary, Chandni Chowk Sarv Vyapar Mandal said, “There was complete panic among merchants.”
In Gandhi Nagar market, touted as largest wholesale garments market in Asia, shopkeepers pulled down shutters fearing raids by tax sleuths. “We heard that raids are being conducted in the market. And, because of currency issues, there was hardly any buyer in the market. Hence, most of us decided to close,” said Mohammad Danish, a dealer in Gandhi Nagar.
Similar “surveys and searches” were conducted in Mumbai and parts of Punjab as well. A senior government official told HT these were not raids but part of “regular surveys.” Until now, three surveys have been conducted in the Capital, two in Mumbai and three in Punjab.
“The department got information of several places where the old currency notes were being exchanged at a discount and even being used to purchase gold. We needed to stop this,” the senior official told HT.
The official said that the department may undertake such surveys in the coming days as well if required. “The message should be clear to those hoarding illegal wealth – they will not be spared and especially since the government came up with the Income Disclosure Scheme,” the official said.
Speaking at a conference, Union finance minister Arun Jaitley said small depositors will be outside the scrutiny of the taxman and will not be harassed. “It is only those with large amounts of undisclosed money who will have to face the consequences under existing laws,” he said.