AHMEDABAD: The ghosts of demonetisation have returned to haunt jewellers in

, as the income tax (I-T) department has asked about a thousand of them to pay tax on cash deposits they made between November 8, 2016 and December 30, 2016. The tax demand has been raised for the assessment year 2016-17 through assessment orders (AOs) issued by the I-T department. Each jeweller is being made liable to pay taxes ranging from Rs 2 crore to Rs 50 crore, according to estimates by Jewellers' Association of Ahmedabad (JAA).

The AOs issued by the I-T department to these jewellers have classified the income of the jewellers as being from undisclosed sources.

"The high incidence of cash deposits in old currency notes during the demonetisation period is suspicious and it was observed that cash in hand increased before the declaration of demonetization and books of account were manipulated," states one such AO, a copy of which TOI has accessed.

Jewellers opposed the I-T department move saying that their income and deposits are substantiated by proper bills and cannot be classified as coming from undisclosed sources. Most jewellers who received AOs in the last week of December, had received show-cause notices from the I-T department between September and December.

"We have responded to all such notices and furnished bills for every transaction. Therefore, our income cannot be classified as undisclosed. Moreover, when notices were issued to us, the department sought PAN data and proof of residence of customers who had bought gold. When there was no rule to seek proof of residence or even PAN data, there is no basis for the department to seek these details. We will not be able to furnish it," said a senior member of the JAA.

Jewellers also raised concerns about having to pay hefty fines during slowdown over such 'baseless' allegations.