Pictures are up on social media sites of Sajid Ahmad Gilkar's body being draped in the flag of the terror group and being taken in a procession to his home in the Malaratta area of the city.
Gilkar was killed, along with two other militants, in the Redbugh area of Budgam during an overnight encounter with security forces on Tuesday.
The police have taken cognisance of the matter and started investigations, police officials said here.
A police spokesman said Gilkar had played a key role in the lynching of Deputy Superintendent of Police Mohammad Ayoub Pandit on June 22 at Jamia Masjid in the Nowhatta area.
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