I-T searches at city-based Kushal Group for insider trading

The Income Tax Department Tuesday carried out search and survey operations on various premises of the paper trading firm Kushal Group for allegedly engaging in synchronized trading to artificially inflate its share price using unaccounted cash. The department officials alleged that despite the main group company--Kushal (formerly Kushal Tradelink) not having any strong business fundamentals, it sold and bought its own shares in large quantities with a view to inflate the price.

The company officials were not available for comments. They also alleged that the company, which is mainly into paper trading, has shown artificial turnover in the balance-sheet. Though it is yet to be investigated, officials said the company is also under the radar for "profit shifting outside the country by over-invoicing".

As many as 150 tax officials were on the search and survey at 22 different locations, including residential and commercial premises, of the Kushal Group in Ahmedabad and other parts of state. The directors of the group are also being questioned, they said, adding search and survey operations will Wednesday as well.

As per the tax officials, the group came under their radar ever since its stock, which was trading around a petty Rs 2 a piece during 2015, has shot up to Rs 3,000 during the demonetization period in 2016. During operations, officials have found Rs 1 crore in cash, nine bank lockers, bogus billing entries and some digital records, which has been sent for forensic analysis, the officials claimed..

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