Mumbai: A diamond merchant and his well-known nephew have been raided by income tax authorities for allegedly dealing in scrapped currency following demonetization, according to diamond market sources.
The raids were conducted in the Bharat Diamond Bourse (BDB) in Mumbai, according to The Times of India.
The Enforcement Directorate (ED) has been "scrutinizing certain entities within the diamond trade for dealing in scrapped notes after demonetization" was introduced on November 8 with the withdrawal of 500 and 1,000 rupee notes aimed at countering corruption and black market activity.
Sources within the diamond trade believe that the ED could have shared information with the tax authorities, according to The Times.
Tax authorities raided four mid-sized gold bullion dealers in Mumbai's Zaveri Bazaar last month after they deposited huge amounts of old notes immediately after demonetization was brought in, the report added.
India, which polishes close to 90 percent of the world's diamonds in volume terms, believes a Donald Trump presidency will bring about an expansion of the US market at a time when Asian buying of luxury stones is declining.
