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2016 (11) TMI 257 - HC - Income TaxAttachment order - recovery orders - property in question was owned by the directors of Baldev Ship Breakers Ltd. Baldev Ship Breakers Ltd. as well as both the directors were in arrears of tax - sale of property - Held that:- Mere communication to the bank would not take shape of the attachment of the property which can be so in terms of rule 48 of the Procedure for Recovery of tax, which happened only on 23.3.2009, that is, long after the property for realisation of the dues of the bank, was sold to Arvindsinh V. Jadeja who in turn, sold part of it to the petitioner. At best, this communication put the bank to notice that the borrower had also other dues. It only guards the bank against a possible future claim from the income tax department. However, in any case, such communication would not make the title of the petitioner imperfect. Despite such communication by incometax department to the bank, the moot question would be, did the department have a prior charge over the property which before raising of the dues of the department was already mortgaged in favour of the financial institution? Even if the bank had disregarded such a communication of the incometax department and not shared with the department, proceeds of the sale of such property, at best, it may be a dispute between the incometax department and the bank and in any case, cannot harm the petitioner who was the subsequent purchaser for consideration without notice. On such grounds, petition is allowed. Impugned attachment is lifted qua the properties in question. We clarify that this would have no effect on the rest of the properties stated to have been purchased by Arvindsinh V. Jadeja which are not the subject matter of this petition.
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