TMI Blog2015 (7) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 80,03,376/-. Hence it is clear that the transfer was for adequate consideration. It is also clear from the records that, while the transfer by way of mortgage is effected, there was no notice of pendency issued to transferee, of the proceedings initiated by the department. As aforementioned, the notice was issued to the assessee by the Assessing Officer one day prior to sanctioning of the loan. The notice was issued on 12.9.1995, whereas the loan was sanctioned by the respondent – Corporation to V.K. Developers on 13.9.1995. Therefore it is clear that the transfer by way of mortgage was also without notice of pendency of the assessment proceedings. In view of the same, the transfer cannot be held to be void. Same views were rendered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Veekay Developers for short) to establish a luxury hotel at Sy.No.32-2A, Bangra Kulur village, Mangalore city on 13.9.1995. However, the said term loan was transferred to V.K. Clubs and Homes Private Limited ( V.K. Clubs for short) on 26.3.1997. The borrower created an equitable mortgage in favour of the respondent by deposit of title deeds on 28.4.1998. The title deeds of the properties so mortgaged are relating to portions of the land and buildings measuring about 4,390 square feet on the ground floor, 2100 square feet on the first floor, 3,515 square feet and 1020 square feet on the third floor and about 18,435 square feet on the 4th, 5th and 6th floors of the commercial building, together with common facilities thereof. By way of furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on behalf of the respondent. 3. We do not find any ground to interfere in the impugned order. Section 281 of the Act declares certain transfers to be void. Section 281 of the Act states that where, during the pendency of any proceeding under the Act or after the completion thereof, but before the service of notice under rule 2 of Second Schedule, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) of, any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding. Based on the wordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there was no notice of pendency issued to transferee, of the proceedings initiated by the department. As aforementioned, the notice was issued to the assessee by the Assessing Officer one day prior to sanctioning of the loan. The notice was issued on 12.9.1995, whereas the loan was sanctioned by the respondent Corporation to V.K. Developers on 13.9.1995. Therefore it is clear that the transfer by way of mortgage was also without notice of pendency of the assessment proceedings. In view of the same, the transfer cannot be held to be void. For the aforementioned finding, we are supported by the judgment of Gujarath High Court in the case of TAX RECOVERY OFFICER .vs. INDUSTRIAL FINANCE CORPORATION OF INDIA AND ANOTHER reported in (2012) 34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of May 9, 1974, or otherwise. His jurisdiction relates to examining possession, and only incidentally, any question of right to possession as claimed by the objector. The High Court has, therefore, rightly set aside the order of the Tax Recovery Officer. However, the right of the Department to have the transfer declared as void under section 281 of the Income-tax Act, as it stood at the relevant time, is not thereby taken away. We are informed that the property continues to be under attachment by virtue of interim orders passed in this appeal. The Department may, if it so desires, take appropriate proceedings in accordance with law for having the transfer declared as void under section 281 of the Income-tax Act. Be that as it ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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