ORDER

The petitioner has challenged the impugned attachment notice dated 22.03.2007 issued under Section 226(3) of the Income Tax Act, 1961.

2. The case of the petitioner is that the property in question which has been attached by the impugned notice dated 22.03.2007 was transferred in his favour under a Family Settlement Deed dated

11.10.2002 and a Registered Settlement Deed dated 11.06.2007.

3. It is submitted that the petitioner is not only in possession of the property but is also receiving rents from the tenants and therefore the question of attaching the property under the provisions of Section 226(3)

of the Income Tax Act, 1961 does not arise.

4. The learned counsel for the petitioner submitted that the property in question is a commercial complex located at New No.365, Old No.133, Mint Street, Chennai 600 079. The commercial complex was built on the immovable property that originally belonged to his grandfather viz., Late.Milapchand Dadha who had divided the property in favour of his three sons viz., M.Mahendrachand Dadha, M.Mahipalchand Dadha and M.Maherchand Dadha on 31.07.1981 by a deed of declaration and late Milapchand Dadha constituted a HUF with his sons. The petitioner is the son of M.Maherchand Dadha.

5. The learned counsel for the petitioner submitted that under a lease deed dated 01.03.1985, the said property was leased to M/s.Dadha Estates (P) Ltd., with the knowledge of the Income Tax Department for a period of 15 years. The rental period was from 1985 to 2002. Income Tax Returns were filed since 1985. On 30.06.1986, Form 34A was filed for issuance of a Tax Clearance Certificate. It is further submitted that, on 11.10.2002, a Family Settlement Deed was executed between the members of the petitioner’s family, i.e. his father M.Maherchand Dadha, his mother M.Madhu Dadha and brother M.Ankur Dadha to transfer the ownership of the property in favour of the petitioner. In this connection, reference was made to the following Clauses from the said unregistered Family Settlement Deed dated 11.10.2002 which is extracted under:-

“Whereas the aforesaid HUF entrusted a project to Dadha Estates Pvt., Ltd, a company owned by the families of Sri Mahendra Dadha and Sri Maher Dadha to put up building and to exploit the income therefrom for a period of fifteen years and after the said period of fifteenyears, the property viz., the building would revert to the HUF

2. At the said settlement, it was agreed that Sri Maher Dadha representing the HUF consisting of the Second, Third and Fourth Parties would negotiate with Sri Mahendra Dadha and Sri Mahipal Dadha and enter into an agreement wherein their shares in property bearing No.365, (Old No.133), Mint Street, Chennai 600 001 called “Dadha Complex” would be renounced in favour of his HUF for consideration not exceeding Rs.55,00,000/- (Rupees fifty five lakhs). For the said purpose, the Fourth Party herein would provide funds to the extent agreed upon. That the said amount would be utilised by the First Party for acquisition of the shares in the property.

6. At the said settlement, it was thus agreed that the property thus secured would stand allotted to and vest absolutely in the Fourth Party who would be providing the funds. At the said settlement it is also agreed that since Sri Mahendra Dadha and Sri Mahipal Dadha were not on friendly terms with the Fourth Party, all negotiations should be carried out without revealing the fact that the Fourth Party would become owner of the property. It was also agreed at the said settlement that if the aforesaid Sri Mahendra Dadha and Sri Mahipal Dadha came to know about the said property vesting in the Fourth Party, they would obstruct the process of division, partition and settlement and transfer of property in favour of the First Party representing himself and the HUF.”

6. The petitioner claims to become the absolute owner of the property since 2002 onwards. The learned counsel for the petitioner referred to yet another Unregistered Family Settl