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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the penalty for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 could be sustained on the basis of the appellant's retracted statement recorded under section 40 and the surrounding circumstances.
Analysis: The charge rested essentially on the appellant's statement recorded during search and seizure. The statement was later retracted, and there was no independent investigation to verify the alleged mode of remittance from abroad. The seized Indian currency, by itself, did not establish tainted receipt or unlawful import. The available bank entries also did not supply reliable corroboration for the department's version. Mere physical receipt of money was held insufficient to constitute the alleged contravention; the receipt, if any, would in any event be attributable to the mother rather than the appellant on the facts found.
Conclusion: The penalty was not sustainable and the finding of contravention was set aside in favour of the appellant.
Final Conclusion: The impugned adjudication failed for want of dependable evidence, and the amount adjusted towards penalty was directed to be refunded.
Ratio Decidendi: A contravention under section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 cannot be sustained solely on an uncorroborated retracted statement; independent supporting evidence is required, and mere receipt of Indian currency does not by itself establish the offence.
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