New Delhi/Alive News: The Supreme Court has allowed the Income Tax Department to reopen tax assessments of Chetan and Nitin Sabharwal, sons of former Chief Justice of India (CJI) YK Sabharwal, over share transactions linked to a Delhi property purchase.
A bench of Justices JB Pardiwala and K Vinod Chandran dismissed four appeals filed by the brothers, upholding notices issued by the tax department in March 2015. The case relates to financial years 2007-08 and 2008-09.
The dispute involves the sale of shares in two companies, Pawan Impex Pvt Ltd and SVIIT Software Pvt Ltd, to GYS Real Estate Pvt Ltd in October 2007. The combined deal was worth ₹255 crore.
The Income Tax Department questioned the share valuation and examined how the sale proceeds were used to purchase a property on Delhi’s Sikandra Road in April 2010. The brothers jointly purchased an undivided half share in the property for ₹61 crore and claimed tax exemption under Section 54F of the Income Tax Act.
The brothers argued that the transactions had already been disclosed to tax authorities and that reopening the assessments amounted to a change of opinion.
Rejecting their arguments, the Supreme Court said the investigation had provided sufficient material to examine whether taxable income had escaped assessment.
The court’s decision allows reassessment proceedings to continue but does not establish tax evasion by the brothers.
The property deal had earlier attracted controversy over allegations of a possible conflict of interest involving the former CJI. Justice Sabharwal had denied those allegations.
