Law:

Section:

Section 132B, read with sections 132 and 6, of the Income-tax Act, 1961 - Search and seizure - Requisitioned assets, application of - Assessment year 2010-11 - Assessee was intercepted by income-tax authorities at Chennai Airport when he had travelled from Singapore to Chennai with 10 kgs of gold - He stated that said gold did not belong to him but was handed over to him by a stranger at Singapore Airport to hand over same to a person at Chennai Airport on instructions of said stranger - On basis of abovesaid information, income-tax authorities conducted a search on assessee and seized said gold - Against said seizure, assessee filed a writ petition claiming that seized gold belonged to him; that he was a NRI doing jewellery business in Singapore; and that seized gold was nothing but his stock-in-trade and could not have been seized - On directions of High Court income-tax authorities conducted an enquiry and on basis of passport entries of assessee found that assessee satisfied residential status test prescribed under section 6(1)(e) and, consequently, his income was taxable in India - An order under section 132B was passed and it was held that since assessee's liability of income-tax for all concerned assessment years was likely to be more than value of seized gold, it could not be released pending finalisation of assessment and recovery of entire tax - On writ, Single Judge held that assessee's case was covered by Explanation (b) to section 6(1)(c) and since he did not stay in India in previous year, viz., 2009-10, for 182 days, he could not be said to be a resident in India for purpose of passing order under section 132B - Consequently, order under section 132B was set aside - Whether since in effecting search and seizure under section 132, income-tax authorities had necessary information as furnished by assessee himself, and said information had every nexus for formation of belief as envisaged under section 132, search and seizure action was in accordance with law - Held, yes - Whether since in view of contradictory stands taken by assessee as to ownership of gold jewellery, it was not known whether jewellery really belonged to assessee or to somebody…

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