Kerala HC releases unaccounted money with Rs. 50 lakhs to the Income Tax Department.

The Kerala High Court on releasing the unaccounted money with Rs. 50 lakhs to the Income Tax Department held that the balance of amenities should be taken into account when deciding on the interim custody of the seized items .

Upon inspection of the vehicle at Tholpetty checkpoint, excise officials discovered that the respondent was carrying cash of Rs.50 lakhs without any proper supporting documents. Therefore, the Respondent was brought before the Thirunelly Police Sub-Inspector and the FIR was registered at the Thirunelly Police Station. The amount was also seized and the same was produced in the First Class Judicial Court II, Mananthavady. After obtaining information from the police inspector of Thirunelly, the income tax authorities issued a summons to appear on the 2nd defendant under section 131 of the income tax law seeking to explain the source of the said amount. He said the money seized was not his money and was given to him by his friends for opening a supermarket in Bangalore. The contact details of these persons have also been provided.

After conducting an investigation, the tax office found that the respondent had not properly explained the source of the same and therefore it was decided to take legal action against him. At the same time, a notice of requisition was issued to the sub-inspector of police under Section 132A(1)(c) of the Income Tax Act, ordering him to deliver it to the requisitioning officer. However, he was informed by the Deputy Inspector of Police that the amount is already deposited in the Mananthavady Magistrates Court and the same is in the custody of the court.

Judge Zyad Rehman AA’s Single Bench held that if the amount is returned to the Claimant here (IT Department), there is a specific procedure being considered to obtain the amount returned in favor of the 2nd Defendant (Razak), whose custody the amounts have been seized… On the other hand, if the amount is returned to the 2nd defendant, it may cause difficulties in initiating and pursuing Section 32-A proceedings. Therefore, the balance of convenience is in favor of the applicant here.

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