Income Tax raids on onion traders in Nashik result in a cash haul of Rs 24 crore

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Studycafe | Oct 25, 2021 | Views 250900

Income Tax raids on onion traders in Nashik result in a cash haul of Rs 24 crore

Income Tax raids on onion traders in Nashik result in a cash haul of Rs 24 crore

Income tax raids on 10 onion traders in Pimpalgaon, Nashik district, which began on Thursday, resulted in the seizure of over Rs 24 crore, the largest haul in the state in recent times, according to sources.

Officials also claimed to have discovered Rs 100 crore in unaccounted income, of which traders admitted to concealing Rs 50 crore. This means that the traders may have to pay tax on the amount disclosed, while the remaining amount will be assessed again.

The action is being handled by the income tax department’s principal director (investigation) office in Nagpur. The raids are also said to have caused a drop in onion prices. The action began on Thursday, and onion prices have dropped by Rs10 since then, reaching Rs30 per kg. This is because traders began unloading stock that was allegedly hoarded to be sold later.

According to traders, new entrants into the market have also had an impact on the rates. 
The taxmen’s action has also brought to light certain trading practises that have resulted in farmers receiving lower rates for their produce while consumers paying more for onions.
Cash can be used to pay for agricultural commodities such as onions. Taking advantage of this, traders were allegedly caught recording large sums of money paid for onion purchases in their books. Large payments shown against individual farmers’ names resulted in no tax liability. This is due to the fact that agricultural income is tax-free. The farmers, on the other hand, received a smaller sum. Displaying purchases at higher rates in the books only served to reduce traders’ tax liability.
Here’s an illustration of how it worked. For the produce, a farmer was paid Rs10/kg in cash. This was the grower’s rate. However, in the books, the price was inflated to, say, Rs30/kg. Finally, if the onions were sold at Rs35/kg, the net profit would be Rs5/kg. However, the profit was much higher and was not disclosed. Taxmen are said to have discovered evidence of real estate purchases made with unaccounted income. Transactions took place over a period of more than a year.
Income Tax raids on onion traders in Nashik result in a cash haul of Rs 24 crore

Income Tax raids on onion traders in Nashik result in a cash haul of Rs 24 crore

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