Important Point—Mere information that a person is in possession of certain jewellery or ornaments cannot be construed to be sufficient for the purpose of action under Section 132A of Income Tax Act, 1961.

1. This writ petition has been filed by Mr. Kamal Mohan Gupta and Mr. Chander Prakash Soni praying for issue of writ of mandamus directing respondents to complete the proceedings if any pending in the matter of petitioners with immediate effect, upon their successfully demonstrating the source of seized assets and to release the stock in trade being the gold studded jewellery belonging to the petitioners and also grant interest in terms of Section 132B(4)(a) of the Income Tax Act, 1961, with further direction to the respondents to grant interest to the petitioners under Section 244A of the Income Tax Act, 1961 and compensate them towards the costs for the entire proceedings from the date of seizure.

2. Mr. Gunjan Pathak, learned counsel for petitioners, submitted that petitioner no.1 is a common agent of gold jewellery, who upon approval of samples, takes orders of the clients for various studded and non-studded jewellery items. He, being working agent, regularly takes goods, such as, studded jewellery or non-studded jewellery, along with other items from various jewellers and travels to various locations for marketing of the goods upon which he procures orders from parties located at various parts of the country, if the goods are approved by them. Petitioner no.1 only receives a fixed commission for the orders procured by him. Further the petitioner no.1 is a registered broker with the Jewellers Association, Jaipur. Petitioner no.2 is a jewller and the proprietor of M/s Gold Theme Jewels, Jaipur. He regularly sends samples to the petitioner no.1 for order procurement.

3. Mr. Gunjan Pathak, learned counsel for the petitioner, contended that under the same modus operandi, the petitioner no.2 handed over the goods to petitioner no.1 against approval memo no.404 (1400 Gms) dated 03.10.2013, approval memo no.405 (650 Gms) dated 14.10.2013 and approval memo no.406 (1051.50 Gms) dated 25.10.2013, as samples to be marketed to the various jewellers in Kolkata city. Petitioner no.1, carrying the samples of petitioner no.2, was travelling from Jaipur to Kolkata through Air Route on 30.10.2013. He, after all security clearances i.e. after routine scanning, checking of his hand baggage by the airport authorities etc., was granted boarding pass to the aircraft. The airport authorities at the Jaipur airport terminal questioned him about the goods and were duly made aware of the goods being carried under approval memo. They also duly informed the Income Tax Department Wing located at the airport of the same and no action whatsoever was taken by the authorities and the petitioner no.1 was permitted to board the flight to Kolkata. However, when the petitioner no.1 arrived at Kolkata airport, the ADIT, Investigation Wing, Kolkata, i.e. the respondent no.1, under pre-information from the Income Tax Authorities at Jaipur, searched the petitioner no.1 by taking him from the Airport, Kolkata to their office located at Chowrangee Square around 10:20 AM on 30.10.2013, whereupon he was also issued a notice for giving statements under the provisions of Section 131 of the Income Tax Act, 1961. The respondent no.1 concluded the search proceedings at around 2:30 AM on 31.10.2013 and also drew a 'panchnama' dated 30.10.2013, whereby the goods weighing 2,141 grams were seized by the authorities. Further, in the light of the proceedings, a search operation was carried out at the office of the petitioner no.2 at around 4:00 PM on 30.10.2013. The statements at both the locations were corroborating and the petitioner no.2 had accepted the material being given to petitioner no.1 on approval basis. Subsequently, however, petitioner no.2, vide letter dated 07.11.2013, requested the respondent no.2 to return the gold studded jewellery being stock in trade, which was also reflected in the accounts and stock register. It was also brought to their notice that the gold studded jewellery was covered under third proviso to Section 132(1) of the Income Tax Act, 1961,