SAGAR SHARMA Vs. ADDITIONAL COMMISSIONER OF INCOMETAX

JUDGEMENT

(1.) This petition, filed under Article 226 of the Constitution of India, is directed against the certificate dated 13th September, 2000 issued by respondent No.1 directing respondent No.2 to recover arrears of tax as due and recoverable from the deceased father of the petitioners followed by the order of attachment dated 5th March, 2003 together with prohibitory order dated 11th September, 2003 and notice dated 5th November, 2009 for settling proclamation of sale with ultimate action dated 14th January, 2010 leading to the sale by public auction and final order dated 6th May, 2010 rejecting objections taken by the petitioners contending that they are bad and illegal and contrary to the provisions of the Income Tax Act, 1961 ( Act for short).

(2.) The facts in short are that on 18th March, 1978, the Trust known as M/s.Ekta Trust ( said Trust for short) was formed for the benefit of three minors, namely, Sagar Sharma, Vishal Sharma and Gagan Sharma, all three sons of Late Harishchandra N. Sharma (H.N.Sharma). The said Trust was settled by two Settlers Mr.Atul Desai and Mr.Shamit Mazumdar with an initial corpus of Rs.20,000/. Thereafter, the said Trust received Rs.10,00,000/as a donation from one Mr.S.L.Sharma from Dubai. The Trust claimed to have purchased two flats Nos.14A and 14B situated on 14th floor of Vidya Apartments, Off C.Loyalka Marg, Chowpatty Ban Stand, Mumbai400 006 and shares of Hotel Horizon Pvt.Ltd. from the funds received by it. The said Trust is assessed to income tax and wealth tax; wherein the Trust claimed to have disclosed the details of the funds received and investments made and that they were

(3.) The petitioners claim that M/s.Ekta Trust distributed its income, funds and properties to its beneficiaries from time to time and that the beneficiaries used the monies received from the said Trust to purchase shares of M/s.Hotel Horizon Pvt.Ltd., which, according to the petitioners were disclosed by the beneficiaries in their income tax and wealth tax returns. According to the petitioners, all the shares were acquired by the petitioners along with their brother Mr.Gagan Sharma in their own individual capacity without any connection with Late Shri H.N.Sharma, who was assessed to income tax in his personal capacity. The demand to the tune of Rs.1.13 crore was raised against him for the assessment year 199293.