Burden to Prove Lawful Source under PMLA: failure to provide documentary proof upheld confirmation of provisional attachment.

Under the Prevention of Money Laundering framework the central legal issue was whether the claimant discharged the statutory burden to prove lawful source for two immovable properties; the Tribunal applied the principle that a person asserting legitimacy must provide satisfactory explanation and documentary evidence, and accepted transactional, valuation and loan analyses showing cash deposits routed through relatives and layering indicative of proceeds of crime. Because the appellant failed to produce bank statements or documentary proof of source or repayments, the Adjudicating Authority's confirmation of provisional attachment was upheld and the appeal dismissed.

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Issues: Whether the Adjudicating Authority was justified in confirming the Provisional Attachment Order in respect of two immovable properties registered in the appellant's name on the ground that the properties were acquired out of proceeds of crime and the appellant failed to disclose the source for acquisition or repayment of loans.

Analysis: The appeal challenges confirmation of provisional attachment of two plots said to have been purchased using proceeds traced to offences investigated by the Enforcement Directorate. The statutory scheme under the Prevention of Money Laundering Act, 2002 places on the person claiming legitimacy of assets the duty to disclose and establish lawful source; Section 24 requires satisfactory explanation and supporting evidence of source. The Tribunal considered recorded statements, bank transaction analysis, valuation and construction costs, loan documents, and the absence of bank statements or other documentation from the appellant to show lawful source or repayment origin. The Tribunal accepted the respondent's findings of cash deposits routed through relatives' accounts and other transactions forming a money trail and layering indicative of proceeds of crime. The Tribunal addressed the appellant's submissions that one property predated the check period and that loans and repayments established lawful source, but found that absence of documentary proof of source of funds or of repayments meant the appellant did not discharge the statutory burden; consequently the Adjudicating Authority's confirmation of the provisional attachment was upheld.

Conclusion: The appeal is dismissed and the confirmation of the Provisional Attachment Order is upheld in favour of the respondent.

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