The Delhi police said on Friday that it might seek the help of the income-tax department in the terror funding case involving All-Party Hurriyat Conference leaders and the Pakistan high commission.

"We are still in the early stages of investigations… we do not rule out seeking assistance from the I-T department," Joint Commissioner (Special Cell) Neeraj Kumar told rediff.com

On Thursday the police had arrested Anjum Zamruda Habib, a resident of Anantnag district in Srinagar, from Nehru Park in Chanakyapuri and found Rs370,000 in her possession.

She said she had received the money, which was to be delivered to Hurriyat chairman Abdul Gani Bhat, from the Deputy High Commissioner of Pakistan, Jaleel Abbas Jilani.

"We had specific information that Habib would be coming to the high commission to take money. We allowed her to go inside the high commission and when she came out we arrested her. Then we raided the Kashmir Awareness Bureau office and arrested its chief Shabir Ahmed Dar with Rs200,000. During interrogation Dar said that the monthly expense of the bureau is around Rs150,000 and this money comes from Pakistan high commission," said a police officer.

Habib, a member of the Khwateen-e-Markaz, was staying at the Kashmir Awareness Bureau office in Malviya Nagar.

"Investigations reveal that the real links are across the border. The money was sent by the ISI [Inter-Services Intelligence] and Habib was only a conduit. This money would have eventually landed up in Kashmir with the terrorist outfits," Kumar added.

However, the Pakistani mission dismissed the allegations as a ‘vicious propaganda'.

It said it had lodged a strong protest with the external affairs ministry.

A release from the mission said that the incident would further strain Indo-Pak relations.

With inputs from the Press Trust of India