TaxTMI 
TaxTMI 
2015 (12) TMI 630
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....ector of Income Tax (Investigation) Ujjain is aggrieved against the order dated 23/4/2014 passed by the JMFC, Badnagar, Ujjain in Case No.01/2014, whereby the JMFC ordered that security be paid for the supurdgi of the cash and silver that were to be handed over to the petitioner Income Tax. 3. Whereas, Writ Petition No.5602/2014 under Article 226 read with Article 19(g) of the Constitution of India has been filed by Rupam, Rajendra P. Gorecha and Nayan Kothari against the Income Tax Department being aggrieved by withholding of the silver bullion without any authority of law. 4. Briefly stated the facts of the case are that on 11.3.2014, information was received by the petitioner department from the police station Badnagar, Ujjain that they had seized cash of Rs. 27.80 lacs. and silver bullion items weighing 479.50 kg valued at Rs. 2.05 crores from respondent Nayan Kothari when he was travelling in an Innova car at Badnagar while coming from Gujarat towards Indore. The Dy. Director of Income Tax (Investigation), Ujjain found upon investigation that Nayan Kothari was not a man of sufficient means and had no satisfactory explanation regarding the silver and cash found in his pos....
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.... any such limitation and conditions as have been imposed by the Trial Court and under Section 293 of Income Tax Act the petitioner was constrained to file the present petition to set aside or modify the impugned condition. Hence, Counsel prayed that the impugned order be set aside. 5. Whereas, in Writ Petition No. 6502/2014 , it was alleged that despite order dated 23.4.2014 passed by the JMFC Badnagar, Ujjain under Section 132(A) (1)(c) of the Income Tax Act, the respondents/Income Tax was duty bound to release and return, the business assets within a period of 120 days on which the requisition was executed under Section 132 A by the Director of Income Tax (Investigation), Bhopal i.e., on 12/3/2014 and the period of 120 days has expired on 10/7/2014 and therefore, in absence of any demand of tax remained outstanding, the respondents are obligated to release and return the entire business assets to the petitioner. The respondents/Income Tax Department had failed to do so. Hence, the present petition. 6. Counsel for the Income Tax Department has vehemently urged the fact that the petitioner Income Tax Department had filed an application under Section 132-A(1)(c) of the Income ....
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....d by Nayan Kothari and Hashmukh Gari and others to indicate that the silver has been transported for the purpose of business activities of the petitioner. The sale was executed by the seller Amit Chouksi, the proprietor of M/s Riddhi Siddhi Corporation on credit given by Rupam s/o Rajendra Gorecha and the affidavit is also available on record. However, the application under Section 132-A of the Income Tax Act by the petitioner Nayan Kothari was rejected and as a consequence of rejection order the petitioners were suffering financial constraints and a registered demand notice was served by M/s Riddhi Siddhi Corporation for dishonour of cheque issued by Rapam Gorecha towards payment of dues for purchase of silver bullion and his business is almost brought to a standstill. Despite these circumstances, the JMFC has directed to hand over the possession and custody of the business assets of the petitioner to the respondents/Department, which is contrary to the facts and circumstances of the case. Besides the respondents have no authority to retain the assets after expiry of 120 days from the date of last authorization as contemplated under Section 132-B of the Income Tax Act and this ....
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.... order, a stay was granted by the Sessions Judge and matter was remanded to CJM with the direction that silver seized should be placed in treasury. However, police entrusted the wrongfully seized silver property to the department and the order was challenged as contrary to law. This Court had held that the Commissioner Income Tax was not in the possession of such information as to arrive to a conclusion that the silver pertained to undisclosed assets of the assessee. Moreover, the silver was found in the possession of the employees of the respondent company and neither the police nor the CIT had at this stage of the proceedings gathered any information on record regarding the ownership of the silver to dispute the version of the respondent company. It was then fallacious on the part of the CJM, to have entertained the application under Section 132-A and the Court had directed handing over of the seized silver/assets to the department and the order of Sessions Judge was upheld. 11. Counsel for the Income Tax has vehemently urged the fact that in the present case the assessee has failed to explain the source of assets made in the application and the assessment proceedings under Se....