TaxTMI 
TaxTMI 
2015 (12) TMI 1744
X X X X Extracts X X X X
X X X X Extracts X X X X
....FIR No. 28/2010, dated 9th September, 2010 on the basis of complaint dated 8th September, 2010 received from Smt. Maria Reuben, Authorized Signatory, ICICI Merchant Services Pvt. Ltd., Bangalore alleging that M/s. Salve Regina Charitable Trust (in short Trust), Bangalore, Mrs. Regina Seelan and its other Trustees indulged in 995 fraudulent transactions using compromised credit card data with the help of other unknown fraudsters and received amounts totalling to Rs. 15,68,53,627/- during 1-7-2010 to 13-8-2010 through the e-commerce gateway provided by them to the official website of the Trust www.src.org. 3. It is alleged in the complaint by M/s. ICICI Merchant Services Pvt. Ltd. (in short Company) that in the month of March 2010, the Trust approached the Company for setting up of a payment gateway for receiving payments and donations electronically. The complainant has provided an e-commerce payment gateway facility to the Trust, which allows them to accept payments over the internet from various credit/debit card holders. The complainant provided said facility to the official website of the said Trust i.e., www.src-trust.org on 28-5-2010 in the name of M/s. Salve Regina Char....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10 and initiated investigations under the provisions of PMLA. 7. During the course of investigation conducted under PMLA, Smt. Regina Seelan, President Trustee of M/s. Salve Regina Charitable Trust in her statement dated 15-3-2011 under Section 50 of PMLA inter alia stated that she is the President and Chief functionary of Salve Regina Charitable Trust; that she registered the Trust on 30-5-2005; that herself and Shri Z.G. Victor D' Souza had the power to operate the bank accounts of the Trust; that the Trust is running "Divya Shakthi Old Age Home" from the rented premises at No. 9, Hanumanth Nagar, Bileshivale, Doddagubbi Post, Bangalore 562149; that she opened a website www.scr-trust.org in March 2009, that she opened a payment gateway through ICICI Merchant Services Pvt. Ltd., that the Trust started receiving payments into its saving bank Account No. 0169010118521 with ICICI Bank, Indira Nagar Branch, Bangalore from 26-6-2010 onwards; that the Trust received amounts totalling to Rs. 13,91,00,293/- into the said account with ICICI Bank between 1-7-2010 to 13-8-2010 (including Rs. 1000/- received by cheque); that out of Rs. 13,91,00,293/- so received, amounts totalling to Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....age to Salve Regina Charitable Trust for a total sum of Rs. 150 lakhs and payment of advance of Rs. 75 lakhs in cash, the appellant stated that he has not entered into the said agreement nor the signature are his and he has not received any cash as advance either from Salve Regina Charitable Trust or from Smt. Regina Seelan. He further stated that he is not owner of the above two pieces of land and they are owned by someone else. However, the appellant stated that he has entered into an agreement to sell dated 16-7-2010 with Shri J. Jayaseelan husband of Smt. Regina Seelan for sale of three sites measuring 1200 sq. feet each at survey No. 16/1, Byrathi Village for a total sale consideration of Rs. 43,20,000/- and received Rs. 33 lakhs as advance by cheques and through RTGS. He further stated that though he received payment by cheques but on directions of Smt. Regina Seelan, he has written in the agreement as if he has received Rs. 25 lakhs in cash. He further stated that in August 2010, Smt. Regina Seelan came to his house and requested him to cancel the agreement and requested him to return the advance amount as she has to show accounts to the Trust and she cannot show the said pu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....purchasers and by using these sale proceeds he has constructed house measuring 600 sq. ft. in the year 2003 in the site bearing house Nos. 27 and 28 bequeathed by his grandfather. He submitted that the appellant, from the remaining sale proceeds of land bearing Survey No. 82/2, has purchased a property bearing survey No. 50/8A measuring 10 guntas through a registered sale deed dated 27-10-2005 situated at Kothnur Taluk, KR Puram Hobli, Bangalore East Taluk for a sum of Rs. 3,50,000/-. After purchase of the land, some part of it was acquired for road widening and with the remaining land, the appellant formed 3 sites in the said land. Out of these 3 sites, 1 site measuring 2000 sq. ft. was retained by the appellant and remaining two sites measuring 2450 sq. ft. each were sold to others. 14. The counsel submitted that in the year 2008-09 from the sale proceeds of part of the land bearing No. 50/8A as well as from the sale proceeds of land bearing Survey No. 82/2 at Byrathi Village as stated in above paragraphs, the appellant constructed a shopping complex in the remaining portion of land bearing survey No. 50/8A consisting of three shops in each floor i.e. ground floor, 1st floo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e cannot show the said purchase to the Trust. I requested her for some time to organize funds. In the first week of September I returned Rs. 33,00,000/- in two instalments to Smt. Regina Seelan." 17. The counsel submitted that the appellant was an innocent intending seller of property to Shri J. Jayaseelan, husband of accused Smt. Regina Seelan and entire advance amount of Rs. 33 lakhs was returned in cash to Smt. Regina Seelan in the first week of September, 2010 which fact is duly confirmed by Smt. Regina Seelan in her statement dated 17th March, 2011 recorded by the respondent under Section 50 of PMLA. He contended that since the entire advance amount of Rs. 33 lakhs was returned, the appellant did not have any money received from the accused out of proceeds of crime and as explained above the property under attachment has been acquired by the appellant out of sale proceeds of the property inherited by him from his grandfather and out of sale proceeds of two sites at Survey No. 50/8A and was acquired prior to the date of alleged offence, therefore, the same cannot be held to be proceeds of crime liable for attachment under the provisions of PMLA. 18. The counsel for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the advance amount to Smt. Regina Seelan though she has stated in her statement dated 17-3-2011 that she has received back advance from Shri Ganesh. This shows that statement of Smt. Regina Seelan dated 17-3-2011 to the extent of return of advance by Shri Ganesh and Shri Ramachandra is not correct and her subsequent statement dated 20-3-2012 is correct which is corroborated by statement u/s 50 of PMLA dated 2-9-2013 of Shri Victor D'Souza, trustee of the Trust. 21. The counsel vehemently argued that though the appellant is claiming to have returned the advance amount of Rs. 33 lakhs but he has not produced any documentary evidence to show that the advance was returned which is against the normal practice in real estate transaction. He drew our attention to the statement dated 20th March, 2012 of Smt. Regina Seelan recorded by the respondent under Section 50 of PMLA and submitted that Smt. Regina Seelan has categorically stated that she has cancelled the agreement with appellant Sri Ramchandra and Shri M. Ganesh and asked them to return the money so that she could pay the sum to Shri B.R. Narayanswamy with whom she has entered into an agreement to purchase another property, h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aritable Trust was running a home for the aged for the last three years or so. Initially the Ashram was in Kothanoor. At that time I used to donate rice or some other ration to the Trust. Later the Ashram was shifted to Hanumanthanagara near Bileshivale Village. Smt. Regina Seelan was the in-charge for the Trust. Sometime during July, 2010 Smt. Regina Seelan approached me with an offer to purchase three sites measuring 1200 sft. each at survey No. 16/1, Byrathi Village. I had entered into an agreement for purchasing 4 plots each measuring 1200 sft. from one Shri Manjunath of Kacharakanahalli. From those plots I agreed to sell 3 plots to J. Jayaseelan husband of Regina Seelan at a total cost of Rs. 43,20,000/-. Regina Seelan gave me two cheques totalling to Rs. 13,00,000/- with different dates. She asked me to prepare an Agreement of Sale in favour of her husband Shri J. Jayaseelan for sale of aforesaid three plots and she told me to write in agreement as if I received Rs. 25,00,000/- in cash as advance and the balance was to be paid by her in about two months time. Before preparing agreement of sale I deposited two cheques for amounts totalling to Rs. 13,00,000/- in my SB a/c with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... mentioned in my statements dated 15-3-2011 & 17-3-2011 are all correct. I state that though I have mentioned I paid Rs. 80 lakhs in cash to B. Narayanaswamy for purchase of building at No. 9, Hanumanthanagar, Bileshivale, K.R. Puram, Hobli, Bangalore East Taluk-562149, I have not actually paid him that amount. That is why we mutually agreed and cancelled the sale agreement dated 10-8-2010. We have also entered into a Cancellation of Sale Agreement dated 2-9-2010. I am furnishing you copies of the Cancelled Sale Agreement and Cancellation of Sale Agreement. Today, you have asked me as to what I have done with the above said Rs. 80 lakhs, which I had not paid to Shri B. Narayanaswamy. My explanation is as follows :- Prior to entering into agreement with Shri B. Narayanaswamy, I had entered into Purchase Agreement with the following persons for purchasing properties and paid the following amounts : S. No. Name of the Person Address of the Property Purchase Value Amount Paid 1. M. Ganesh, S/o Krishnappa, Gundur Village, Bidarhalli Hobli, Bangalore 2 acres at Survey No. 61/P 11 & 61/P 13, New No. 81, 82. Registration No. 13/05-06, Gundur Village, Bidarhalli Hobli, Bangalore ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es Rs. 75 lakhs Rs. 41 lakhs (Rs. 23 lakhs by cheque (ICICI Bank), Rs. 10 lakhs by RTGS (ICICI Bank) and Rs. 8 lakhs by cash) That you told both of them that you want to cancel the agreements and asked them to return the money; that Shri Ganesh and Ramachandra did not in fact repay you the money; that hence you could not pay Rs. 80,00,000/- to Shri B. Narayanaswamy for the purchase of property and that the sale agreement dated 10-8-2010 was cancelled on 2-9-2010. Q7. Please explain which is correct? Whether you have paid money to B.R. Narayanaswamy in connection with the sale agreement, or not? Ans. I state that as stated in my statement dated 20-3-2011 I had not paid any money to Shri B.R. Narayanaswamy for the reasons explained therein." 28. Mr. Zepherious Gration Victor D'Souza who was trustee of M/s. Salve Regina Charitable Trust in his statement u/s 50 of PMLA recorded on 2-9-2013 stated that agreement to sell dated 16-7-2010 between Sri Ramchandra and Shri J. Jayaseelan is genuine and advance paid to Sri Ramchandra has not been returned by him which is adverted to as follows : "Question: You are now being shown a copy of agreement of sale dated 16-7-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at she has received back advance from him. This shows that statement of Smt. Regina Seelan dated 17-3-2011 to the extent of return of advance by Sh. M. Ganesh and Sri Ramchandra was not correct and her subsequent statement dated 20-3-2012 cannot be disbelieved which is reaffirmed by Smt. Regina Seelan vide her statement dated 16-9-2013 and is also corroborated by statement dated 2-9-2013 of Shri D'Souza who is trustee of Salve Regina Charitable Trust and was aware of the agreement to sell dated 16-7-2010 between Sri Ramchandra and Shri J. Jayaseelan to which he was also a witness and confirmed that advance of Rs. 33 lakhs paid to appellant was not returned by him. 31. The plea of the appellant that statement dated 20-3-2012 of Smt. Regina Seelan is a retraction of her statement dated 17-3-2011 and should not be relied upon is not sustainable. A careful consideration of statement dated 20-3-2012 of Smt. Regina Seelan reveals that the statement is made voluntarily without any threat, coercion or compulsion and in her statement she has elaborately stated the entire facts relating to transaction with the appellant and categorically stated that the advance was not returned by appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in bank and how and when the amount out of such sale consideration was used for construction of subject property. No material has been brought on record by the appellant to show that the sale consideration, as claimed by him, has been used in the construction of subject property. Further, except making a claim that the subject property was constructed in the year 2008-09, the appellant has not disclosed any details regarding construction of the subject property such as date of approval of construction plan, total area constructed, cost of construction as per approved plan, completion certificate, valuation report showing amount invested in the construction of subject property etc. to prove that the subject property was actually constructed in the year 2008-09. Perusal of bank statement of appellant reveals that the appellant has made withdrawals mostly in cash against receipt of advance payment of Rs. 33 lakhs in bank and their true utilization is not disclosed by the appellant which shows that the proceeds of crime as received by him has changed its form which is known to appellant only. It is important to recall one fact as admitted by the appellant in his statement u/s 50 of PML....