Indore, April 2, 2018

Indore has become a mushrooming ground for bogus companies earning long term capital gains via penny stocks, a senior income tax official said.

After an exhaustive exercise to identify non-filers, the I-T department is now turning its focus towards bogus companies operated from the region. A senior I-T official said, “Data mining has helped us to identify hundreds of fake companies operated only on papers in Indore and nearby areas.”

The department is taking out details of buyers and sellers of penny stocks involved in long term capital gains from various sources and records available with the department.

“We will now be cracking these bogus companies operated only on papers and with fake documents and minting money. We have collected extensive data on such companies,” he said.

Over 50 cases where beneficiaries involved in earning long term capital gains via penny stocks have been identified by the department. The department has filed around 50 cases of prosecutions before the district court.

A senior chartered accountant of the city who did not wish to be named said, “The I-T department is filing a lot of prosecution cases to bring financial discipline and meet their target, but at the other hand such harsh step by the department has panicked people.”

Industry experts said the department is being very harsh just to meet their financial target of Rs 2,173 crore.

Another chartered accountant said, “The department should not panic people but try to convince them to pay tax on time. Anyway with tax filing for assessment year 2017/18 is coming in the same financial year, the department can easily achieve its target.”

Earlier, the returns could have been filed upto one year from the end of the assessment year, but now returns can be filed only upto the end of the assessment year.

[The Times of India]