Panchanama Invalid as Jewellery Was Already in Custody | HC Orders Release to Assessee

Case Details: H. K. Jewels (P) Ltd vs. Assistant Director of Income Tax Investigation - [2025] 180 taxmann.com 664 (Bombay)

Judiciary and Counsel Details

• B. Raghu Kiran & S.V. Kasi Visweswara Rao, Member

Facts of the Case

The assessee company was engaged in trading, manufacturing, importing and exporting gold, silver, platinum, and other precious metals. It did not have its own branch/office/shop in Bhubaneswar. Still, it transacted with various customers in the region by sending its products to Bhubaneswar via a secure courier service.

On 12-5-2024, officials of the IT Department intercepted a certain weight of gold jewellery, which was to be shipped back to Mumbai via a courier company by air transit at Bhubaneswar Airport, and took the same into their custody.

Thereafter, on 1-6-2024, a Panchanama was drawn wherein it was inter alia stated that said gold jewellery inventory was seized. It was found that, although the custody of gold jewellery was taken on 12-5-2024, the Panchanama suggested that the search/seizure commenced only on 1-6-2024.

It was also found that the valuation of said gold was done by the IT Department on 17-5-2024. Assessee filed a writ petition before the Bombay High Court, contending that the entire action taken by the Department was contrary to law and, thus, the impugned Panchanama was to be quashed and said gold jewellery was to be released to the assessee.

High Court Held

The High Court held in favour of the assessee and ruled that the explanation given in the affidavit was not only unacceptable but also contrary to the record. It was found from the evidence on record that, in fact, this jewellery was the stock-in-trade of the petitioner. It was a stock-in-trade of the petitioner, and the petitioner had produced ample evidence to show the same.

Thus, the entire action taken by the respondent authorities was contrary to the law.