AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 587
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....MLA- 2486/DLI/2018 MP-PMLA- 4889/DLI/2018 (Stay) FPA-PMLA- 2516/DLI/2018 - -<br>PMLA<br>JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER For the Appellants : Mr. R K Rawal, (A.R.) Ms. Ruchika, Advocate For the Respondent : Mr. Priyank Khattar, Advocate For the Appellants : Mr. Mehendra Pratap, Advocate For the Respondent : Mr. Priyank Khattar, Advocate JUDGEMENT This set of seven appeals arises out of the order of the learned Adjudicating Authority ("AA") under the Prevention of Money Laundering Act, 2002 ("PMLA, 2002") dated 09.07.2018 confirming the Provisional Attachment Order ("PAO") passed by the Directorate of Enforcement, Delhi under section 5(1) of the Act through which various immovable and movable properties of the appellants herein were attached. 2. The relevant facts, as recorded in the impugned order passed by the Ld. AA are that on the basis of a complaint by the Deputy Director, Directorate of Revenue Intelligence (DRI), Lucknow Zonal Office, a case vide FIR No: 76 dated 18.01.2015 was registered at Police Station, Kavi Nagar, District Ghaziabad (U.P.) under section 420, 467, 468,471 and 469 of the IPC against one Shri Mani....
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....x, P.R. Forex and M/s Kamakhya Forex Pvt. Ltd., all based in Delhi. For the said purpose, Shri Manish Jain had also set up his own concern, namely, M/s Pacific Technology in Hong Kong in 2004. Foreign exchange remittances were made into the HSBC account of the said entity. The foreign exchange remitted to the said HSBC account was further transferred to firms based in China/ Hong Kong/ USA/ India etc. He also admitted that the remittances were made on account of under-valuation made by Indian importers who imported mainly from Chinese firms and over-invoicing made by Indian exporters whose names and account numbers were provided to him to transfer the specified amount of money in the accounts of Chinese, Indian and other firms. A major portion of foreign exchange remitted to Hong Kong was received in India from importers, namely, M/s Brother Impex and M/s Shri Krishna Overseas of Delhi and others. Funds were also transferred into the accounts of various exporters in India from the accounts of companies in Hong Kong belonging to Shri Manish Jain. 7. Consequent to the investigations, a Provisional Attachment Order ("PAO") came to be passed by the respondent directorate on 18.01.20....
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.... the said company at the relevant time is totally incorrect. It is also claimed that the attached properties were acquired out of explained sources, duly disclosed in the return of income. 9. The respondents have strongly contested the contentions raised on behalf of the appellants. It is pointed out that cash was delivered by Sanjeev Wadhwa and Rajeev Wadhwa or their employees at the doorstep of Manish Jain and Rakesh Jain at Ghaziabad with the instruction slip regarding further remittance out of India. Maximum remittances were sent from the accounts operated by Manish Jain for Rajeev Wadhwa, Sanjeev Wadhwa and Pravesh Gujral and these persons were further associated with many importers and exporters. A commission was earned by Rakesh Wadhwa from importers on the remittance. The statements of Shri Ram Sagar Sahani, driver of Manish Jain recorded on 07.03.2016, Shri Sunil Lamba recorded on 05.02.2016, Shri Ashok Gupta recorded on 20.01.2016, and Shri Rakesh Jain recorded on 27.01.2016 are relied upon by the respondents. 10. It is also pointed out that the appellant, Shri Rajeev Wadhwa is one of the accused in the Supplementary prosecution complaint filed on 11.05.2016. FPA....
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....t any stage asked to furnish details of the sources of the bank balances provisionally attached either through any written communication or when they attended the office of the complainant department in response to telephone calls. There is nothing in the complaint to show as to how the complainant has come to the conclusion that the bank balances represent proceeds of crime. There also is nothing in the complaint to show which particular proceeds of crime are generated from which schedule offence and the manner of acquisition and projection of the alleged proceeds of crime. The complaint is totally silent regarding the link or nexus of the bank balances attached with any proceeds of crime. The bank balances attached by the respondents were legitimate income of the company duly recorded in the books of accounts and declared in the income tax returns. All the applicable taxes have been paid. The appellant had made these submissions before the Ld. AA also vide reply dated 04.04.2018. The Ld. AA failed to establish any money trail or proceeds of crime. The submissions made by the appellant have been ignored by the Ld. AA, which has not given any findings on the same. The Ld. AA failed....
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....r of the company, in his various statements recorded by the complainant department, had explained the matter in detail. However, the said statements were suppressed by the complainant department. It is prayed by the appellant that the department may be directed to produce the said documents for proper appreciation of matters. The appellant has been an income taxpayer since the date of incorporation. Copies of acknowledgements for having filed income tax returns showing the tax amounts paid for the period 2014-18 have been submitted to substantiate the claim. 16. The respondents have strongly contested the submissions made on behalf of the appellants. It is submitted by them that huge cash used to be collected in the accounts of the appellant company, among others, which was received from importers and was subsequently remitted abroad to Hong Kong using accounts of fake companies operated by Manish Kumar Jain. A commission was earned by P.R. Forex and its directors on the overall transaction. The statements of Shri Ram Sagar Sahani, driver of Sh. Manish Jain recorded on 07.03.2016, the statement of Shri Rakesh Jain recorded on 27.01.2016, and that of Shri Manish Kumar Jain record....
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.... mutatis mutandis the same as the ones made on behalf of Rajeev Wadhwa which have already been discussed in detail. It is contended that the properties attached by the respondent Directorate are neither proceeds of crime nor properties made from any proceeds of crime. It is further contended that the FDRs were attached by the complainant department on 12.08.2015, bank accounts were seized on 16.11.2017, and the PAO in respect of the properties was issued on 19.01.2018. Since the period of 365 days in respect of these FDRs expired on 12.08.2016, the same are liable to be released in terms of the judgement of the Hon'ble Delhi High Court in Mahender Kumar Khandelwal versus Directorate of enforcement WP(C) No. 10993 of 2023 wherein it was held that on expiry of 365 days, the seizure is liable to be returned if investigations are not completed by the time. The appellant contends that investigations were continuing till 06.10.2018 in respect of the seized items. 25. The respondent contends that the appellant, Shri Gurdeep Kumar Gujral, along with Bhavesh Kumar Gujral, Subhash Arora and the Wadhwa brothers used to run the business of P.R. Forex. Later Sanjeev and Rajeev Wadhwa resigne....
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....n is an accused in the second supplementary prosecution complaint filed on 06.10.2018 and is the main accused, Shri Manish Kumar Jain. CONSIDERATION AND FINDINGS 30. We have given careful consideration to the rival submissions of the parties to all these appeals and perused the documents on record. We note that prosecution complaints under PMLA, 2002 have been filed and proceedings arising out of the same are pending against all the appellants involved in these appeals. Evidence exists in the form of statements of witnesses, including that of the main accused and other accused persons apart from other evidence, which incriminate the appellants. On the other hand, other than bare denials, the appellants have not presented any credible evidence to discharge their burden of proof under section 24 of the Act. 31. Equally, the available evidence also points emphatically towards the existence of a complex web of interconnected transactions. Cash was delivered by Sanjeev Wadhwa and Rajeev Wadhwa or their employees at the doorstep of Manish Jain and Rakesh Jain at Ghaziabad with the instruction slip regarding further remittance out of India large remittances were sent from the acc....