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HC quashes IT order on
Dawood property: PTI

The impugned order of the tax recovery officer delivered on November 6 last was set aside on January 15 by Justices S H Kapadia and V C Daga, who directed the department to consider objections from the two original owners within eight weeks.

While the income-tax department harped on information given by the office of the police commissioner that the property belonged to the Karachi-based don, Zulker Nain Abdeali Dholkawala and Shabbir Gulam Husein Dholkawala claimed that they were the real owners, having purchased the building from Huseinabai and Fatimabai Bagasrawala last year.

The judges ordered that the contentions of both sides were kept open and although they were setting aside the impugned order of the tax recovery officer, the attachment of property would continue.

On January 8, the high court had stayed for a week the auction of the building along with other properties of Dawood by the income-tax department to recover dues from the don.

Counsel for the petitioners, Birendra Saraf and Naseem Patrawala, urged that Dawood never had rights to the property.

The respondents had attached the property without basis and solely on the ground that Dawood's mother was a tenant. She has passed away and had sublet her premises to someone else, they argued.

The counsel for the petitioners said that the property belonged to Mohammedbhai Esoofbhai Bagasrawala who gifted the building to his daughters Huseinabai and Fatemabai in 1953. Last year, they sold the building, at Mazgaon, in central Bombay, to Zulker Nain Abdeali Dholkawala and Shabbir Gulam Dholkawala.

Dholkawala had challenged the sale of the building, put up for auction for non-payment of taxes to the income-tax department. They claimed they owned the building and held the conveyance deed.

The Bagasrawala sisters, who sold the property to the Dholkawala brothers, claimed that they had been paying taxes for the building since 1953, when it was gifted to them by their father.

On the other hand, the income-tax department claimed that the property belonged to Dawood and had been attached on January 27, 1998. The transfer of property to the Dholkawala brothers was void because they had purchased the attached property last year.

Income-tax department counsel, B M Chatterjee conceded before the high court that the tax recovery officer had not considered the title of the property and acted merely on information given by the police.

Under instructions from the assessment officer, the income-tax counsel urged that if the officer was given an opportunity he would consider the position.

The high court then directed Huseinabai and Fatemabai Bagasrawala to file objections to the attachment of property by the income-tax within four weeks and directed the tax recovery officer to consider it within eight weeks.

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