NSEL fiasco: Taxman finds no stock at warehouses

The National Spot Exchange (NSEL) fiasco is getting murkier by the day. According to sources in the tax department NSEL has no stocks in its warehouses and hence no purchases were made. However, the taxman is probing if any unaccounted money has been siphoned off. CNBC-TV18’s Aastha Maheswari reports.

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The department had conducted surveys on all the warehouses of 24 borrowers. It found that no stock actually existed in these warehouses. In addition to this, there was no actual transaction and there no purchase actually took place and thus no tax liability holds in this case of transaction.
Also, the department said that since no actual transaction took place, this was only on paper and thus they have raised questions on the unaccounted money that could be siphoned off in this case. It is also probing and finding the details of the investors who lent money at this point of time.
Now, it is likely to finalise the report and submit it to the Central Board of Direct Taxes (CBDT) in the next 10-15 days. Also, the department is working on getting names of the 14,000 investors who had lent money to the borrowers. Therefore, this seems to be an interesting development and a step towards some agencies taking some action, but actually comes through is yet to be seen.

NSEL late in the evening today has also declared  9 members as defaulters, and among these 9 members, the exchange has initiated case of investigation against 5 defaulting members which according to NSEL did not have adequate commodities in the warehouses. These 5 members are Erk Imports, Lotus Refineries, NK Proteins, Vimladevi Agrotech Ltd, Yathuri Associstes.
Tomorrow is the last date for the second payout schedule, and according to sources, currently NSEL has only Rs 12.5 crore versus Rs174 crore as scheduled.