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Skyrocketing onion prices due to possible price, stock manipulation; I-T dept probe reveals

I-T dept survey at the premises of six major onion traders in Madhya Pradesh reveals Rs 5 crore-plus concealed income, unaccounted stock of Rs 37 lakh found with two traders.

Published: 12th November 2019 10:45 PM  |   Last Updated: 12th November 2019 10:48 PM   |  A+A-

Onion

For representational purposes

By Express News Service

BHOPAL: Is it the loss of crops due to destructive rains-floods alone or manipulation by traders/brokers that triggered the rise in the market price of onions up to Rs 100 per kg?

Daylong surveys by Income Tax department at shops and godowns of six major onion traders/brokers in Shajapur district – the prime onion belt of Madhya Pradesh – carried out on Monday has led to the disclosure of over Rs 5 crores concealed income as well as evidences that suggest that these traders could have manipulated prices and stocks to inflate retail prices in open market.

ALSO READ | Government will import 1 lakh tonnes onion to check price rise: Consumer Affairs Minister

The surveys, which started at around 11 am and continued till night on Wednesday, also led the I-T department sleuths to unaccounted old onion stock worth around Rs 37 lakh at the premises of two traders.

Surprisingly, just a few hours after the surveys in state’s main onion belt of Shajapur district, the retail prices of onion in Bhopal have declined on Wednesday by Rs 10 to Rs 20 per kg from Rs 90 to Rs 100 per kg. And in the MP capital Bhopal, prices came down to Rs 70 to Rs 80 per kg in MP capital Bhopal.

According to sources privy to the ongoing probe, the surveys revealed that these traders could be paying just Rs 10 to Rs 20 per kg to farmers for the onions, which are ultimately reaching the customer at retail prices ranging between Rs 80 to Rs 100 per kg.

But the difference amount of Rs 60 to Rs 75 per kg is probably getting divided and distributed to the various levels of traders and brokers, who deal in cash which is against the provisions of the Income Tax Act. 

ALSO READ: Centre to crack down on traders manipulating onion prices

The surveys at shops-godowns of the six traders in Shajapur (which was part of larger nationwide I-T department raid, which also covered the markets in Delhi and Lasalgaon (Nashik)) have revealed everyone in the onion market conducts business in cash.

“Making purchases from farmers in cash is allowed. But the surveys have revealed that entire trade between traders and brokers too is happening entirely in cash, which is illegal and could be part of well thought strategy of inflating onion prices in market via hoarding and manipulation of cash and stocks,” a key source privy to ongoing investigation revealed.

Surveys have shockingly revealed that none of the traders/brokers are maintaining any records or Books of Accounts of trade (purchase and sales) on a day-to-day basis and even the annual tax returns being filed by them are based on annual bank statements only.

“So far over Rs 5 crore undisclosed income (tax evasion) has been detected, but the scrutiny of papers seized from the surveyed premises could make the final tax evasion figure much more than Rs 5 crore detected initially,” added the source.

ALSO READ: MMTC floats tenders for import of 4,000 tonnes of onion

The ongoing probe has also led the sleuths to papers which reveal the possibility of major advances and loans possibly among traders.

“Some papers seized from the raided premises have revealed evidence of price manipulation by traders, which could have triggered a rise in retail prices up to Rs 90 to Rs 100 per kg after Deepawali,” sources confided.

According to I-T department sources, the surveys are a stern signal to onion traders and brokers that they are under continuous watch and won’t be spared in case of any wrongdoing to inflate retail prices.



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