The court upheld the legality of cash seizure under the Income Tax Act, emphasizing the need for claimants to provide credible evidence of ownership and the lawful origin of seized funds.

ORDER: (per the Hon’ble Sri Justice P.SAM KOSHY)

Heard Mr. Vedula Srinivas, learned Senior Counsel appearing on behalf of Ms. Vedula Chitralekha, learned counsel for the petitioner and Mr. B. Narasimha Sarma, learned Additional Solicitor General along with Ms. Mamata Choudary, learned Senior Standing Counsel for Income Tax, appearing for the respondents.

2. The present is a writ petition which has been filed seeking for issuance of a writ in the nature of Mandamus holding that the action of respondent No.6 in seizing cash of Rs.3,75,30,000/- belonging to the petitioner on 15.09.2020 to be illegal, unconstitutional and contrary to the provisions of Section 152 of the Income Tax Act, 1961 (briefly ‘the Act’ hereinafter). It was also the relief sought for by the petitioner that the action on the part of respondent No.6 in further handing over the aforementioned cash to respondent Nos.3 and 4 and further the action of respondent Nos.3 and 4 in declaring the said cash to have been recovered from the premises bearing No.8-2- 684/4/13/B, Anand Banjara Colony, Road No.12, Banjara Hills, Hyderabad, by way of a panchnama prepared on 16.09.2020 to be also illegal, unconstitutional and contrary to the provisions of Section 132 of the Act.

3. The petitioner claims himself to be the proprietor of M/s. S.K. Traders which is engaged in the business of agricultural produce like vegetables, fruits, post-harvest activities and other agro-based produce since 1984. He claims himself to be operating his business from the premises that he has allegedly taken on rent i.e. No.8-2- 684/4/13/B, Anand Banjara Colony, Road No.12, Banjara Hills, Hyderabad. According to him, on 03.09.2020, he had come from Ahmedabad via Bombay, Pune and Solapur to Hyderabad bringing along with him cash of Rs.3,75,30,000/-. It was contended by him that he had come from Ahmedabad on a Scorpio vehicle bearing registration No.MH19BJ6470 which he had purchased from one Shailesh Kumar Patel on 05.09.2020.

4. It was the further contention that on 15.09.2020, the petitioner was in the process of depositing the said cash with the Canara Bank, Kundanbagh Branch and the said amount was kept in the Scorpio vehicle for the said purpose. However, in between the said vehicle was intercepted by respondent No.6 who belongs to the Police Task Force for the State of Telangana and they recovered an amount of Rs.3,60,00,000/- from the said vehicle in cash. The vehicle at the relevant point of time was being driven by Eshwar Dileepji Solanki and there was the co-driver Harish Ram Bai Patel. Subsequently, on interrogation with the two drivers of Scorpio vehicle, they disclosed the cash amount to have been received from the local manager of M/s. P. Vijay Kumar & Co., a company placed at Bombay who had their local office at Hyderabad located at No.8-2-684/4/13/B, Anand Banjara Colony, Road No.12, Banjara Hills, Hyderabad. In the course of search and seizure of the said premises, which according to the drivers was local office of M/s. P. Vijay Kumar & Co., they received another cash amount of Rs.15,30,000/-. Thus, they took into custody the entire amount of Rs.3,75,30,000/-. Later on, the entire cash amount and the two persons were handed over by respondent No.6 to respondent Nos.3 and 4.

5. The petitioner claims the two drivers of the said vehicle and the vehicle also belonging to him and the drivers were also his staff and the cash amount was his business money which is already reflected in his bank statement and the entire seizure proceedings initiated to be bad in law.