IT officials raid MCX

The Income Tax Department is conducting raids on the Multi-Commodity Exchange and its "associates" in Mumbai on Tuesday, but there were no searches on stock brokers.

Though an official statement issued in this regard did not name MCX, sources said raids were conducted on the premises of MCX and one of its Ahmedabad-based official.

"The Income Tax Department is conducting searches on a commodity exchange and its associates in Mumbai," the statement said.

Surveys are also being conducted on the exchange branches in Ahmedabad, Bangalore, Chennai, Delhi and Kolkata, the statement added.

However, there is no raid on any share broker connected with a stock exchange, the statement said.

The action by IT officials came days after the Financial Technologies-promoted MCX sought details from its members about their Mumbai-based clients whose trade on the exchanges exceeded more than Rs one lakh in the January-March quarter.

Although the exchange termed the circular as a 'routine' affair, saying the same is being issued every quarter, sources said it was based on the Income Tax Department Directive.

The notification said: "All the members shall submit the details of their clients (a) who executed transactions of value exceeding Rs 1 lakh and (b) who are located in Mumbai and Navi Mumbai."

MCX members felt that exchange should not provide the details to any other authority except the market regulator Forward Markets Commission (FMC) unless income tax authority asks details of any particular transaction or a trader.

"Only FMC has the power to know the details about the transactions, which are anyway known to the commodity exchanges," MCX member Sushil Pawa said.

FMC Chairman B C Khatua said other authorities (apart from FMC) can ask for details if they require certain specific information related to a transaction or a trader.