Income Tax dept loses seized jewellery worth over Rs 90 lakh kept in bank custody:
Allahabad High Court orders dept to compensate the taxpayer
Sep 29, 2025
Synopsis
Mr. Jain's seized gold jewellery, worth over Rs 90 lakh, was stolen from a bank while in Income Tax custody. The Allahabad High Court ordered the Income Tax Authorities to pay Jain his compensation within four weeks, holding them responsible for the loss. They must verify his valuation and face 12% penal interest if payment is delayed.
When the income tax department raided Mr Jain’s place, they found several gold jewellery pieces likey to be worth over Rs 90 lakh. These were seized since Jain couldn’t account for them. Oddly enough, the seized jewellery which was kept in safe custody of a nationalised bank, ended up getting stolen.
While the income tax case regarding the jewellery seizure was still in progress, this theft occurred in the bank. So, Jain felt aggrieved and filed a case against Union Bank of India, the income tax department and the bank branch manager in Allahabad High Court, demanding them to compensate him for this big loss.
Jain asked for Rs 94 lakh (94,64,844) in compensation with 9% interest per annum from July 30, 2025 until the payment is made.
Allahabad High Court said this
The Allahabad High Court in its judgement order (WRIT TAX No. - 4160 of 2025) dated September 25, 2025 said:
It is clear from the facts that the Income Tax Authorities are delaying the entire process.
The money should have been returned to the petitioner (Jain) in the year 2023 itself when the petitioner (Jain) had agreed upon the settled amount of Rs 41 lakh (41,52,146).
However, no money has been received by the petitioner (Jain) with regard to the seized jewellery, which has been lost by the respondent Bank.
The petitioner (Jain) is not concerned with whether the money is paid by the respondent Bank or by the Income Tax Authorities. As the jewellery has been seized by the Income Tax Authorities, the loss of jewellery would amount to loss by the Income Tax Authorities, and accordingly, payment of the said jewellery has to be made by the Income Tax Authorities.
Allahabad High Court judgement
The Allahabad High Court said that in the light of the above-mentioned circumstances, the Income Tax Authorities are directed to look into the valuation done by the petitioner (Jain) on July 30, 2025 and upon verification of the said valuation, make payment of the said amount within a period of four weeks from date.
Judgement: “We make it clear that the petitioner (Jain) should be paid the amount within the aforesaid period, otherwise the Income Tax Authorities shall be liable to pay penal interest of 12% on the valuation of the Jewellery starting from the date of seizure of the said jewellery. The Income Tax Authorities are at liberty to recovery the amount from the respondent Bank in accordance with law. With the aforesaid directions, the writ petition is disposed of.”
[The Economic Times]
