SC upholds HC order allowing I-T to reassess income of ex-CJI's sons

The Supreme Court has upheld a Delhi High Court order allowing the Income Tax Department to reassess the income of the sons of the former Chief Justice of India, YK Sabharwal, for the financial years 2008-09 and 2009-10. The bench of Justices J B Pardiwala and K Vinod Chandran dismissed the Sabharwals' appeal, stating that the notice issued by the department in 2015 was valid.

The notice was based on reasons duly recorded and supported by tangible material from a report of the Directorate General of Income Tax (Investigation) Unit in Noida. The report concluded that the shares of two companies were overvalued when compared with the cost of their land and building. Following the assessment, the investigation unit conducted inquiries into the value of the shares and issued a notice under Section 148 of the Income Tax Act for reassessment.

The court noted that the investment in the properties was made through a court auction, with the major source of funds being the sale proceeds of the shares of the companies.