Ajit Atwal apologised for any "offence" the picture might have caused but insists he is the victim of a smear campaign in the run-up to May, when he stands for re-election as Liberal Democrat councillor for Abbey ward in Derby.
"The image has been removed from Mr Atwal's Twitter feed and Derby City Liberal Democrats have also launched an investigation into the incident," a Lib Dem spokesperson said.
Atwal claims the photograph was taken seven months ago while he was on holiday in India, and posted on his Twitter page.
"I am someone who urges people to go to the gym, keep fit and stay away from crime. I realise that the picture may cause offence to some people and so I have removed it," he told the 'Derby Telegraph'.
"The gun was not loaded and I asked someone to take a picture of me holding it last September when I was on holiday in India. It has been my profile picture on my Twitter page for seven months and no-one has complained during that time. But now, in the run-up to an election on May 22, someone has told the press about it.
Derby City Council leader, Labour party's Paul Bayliss, has demanded his resignation over an "appalling lack of judgment".
"I think Ajit Atwal should stand down from his role as both a city councillor and a magistrate. To be considered for both positions you have to pass a fit and proper person test and I think this photograph brings this into question. He should consider his position," he said.
Atwal had also hit the headlines earlier this year when he and his son, Arjun, chased a would-be burglar from their home after he tried to break in.
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