Law:

Section:

[2009] 182 Taxman 203 (Madhya Pradesh)/[2009] 308 ITR 273 (Madhya Pradesh)/[2009] 222 CTR 100 (Madhya Pradesh) [2009] 182 TAXMAN 203 (MP) HIGH COURT OF MADHYA PRADESH Krishnagopal v. Director of Income-tax* (Investigation) AJIT SINGH, J. WRIT PETITION NO. 12696 OF 2007 JULY 3, 2008 Section 132A of the Income-tax Act, 1961 - Search and seizure - Requisition of books of account, etc. - Whether for taking an action under section 132(1), there has to be a rational connection between information and belief about assets which have not been or would not have been disclosed by person concerned - Held, yes - Whether belief required under section 132A is subjective and not open to objective test - Held, yes - Petitioner was carrying on business in purchase and sale of raw silver and manufacture and sale of silver ornaments - During routine checking in a hotel, police authorities seized certain raw silver, silver ornaments and cash from possession of petitioner and informed Income-tax Department - Thereupon, Director of Income-tax (Investigation) (DIT) issued warrant of requisition under section 132A to concerned police authority - Petitioner filed writ petition assailing validity of said warrant of requisition on ground that conditions precedent for exercise of powers under section 132A(1) were not satisfied - Whether since record produced by revenue authorities clearly established that DIT was in possession of information from which he had reason to believe that money and silver seized from petitioner represented wholly or partly assets which had not or would not have been disclosed for purposes of income-tax and from reasons recorded by him it was not possible to hold that information coming to his notice was either not tangible or had no nexus with formation of his belief about assets, warrant of requisition issued by him was valid in law - Held, yes FACTS The petitioner carried on the business in the purchase and sale of raw silver, manufacture and sale of silver ornaments. During routine checking in a hotel, the police authorities found the petitioner in possession of raw silver and silver ornaments and cash. The police, on suspicion that the silver and cash might…

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