AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 665
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....posed upon Shri Vikram Singh and on Shri R. C. Jain for contravention of Section 9 (1)(c) of FERA read with Section 68(1) ibid. Further, imposition of penalty of Rs. 5 lakhs was made on Shri Vikram Singh for contravention of Section 8(1) of FERA. 2. The Appellants challenged the Order dated 05.02.2007 of this Tribunal rejecting the applications for the waiver of pre- deposit of penalties before the Hon'ble Delhi High Court. On rejection of their challenge by the Hon'ble Delhi High Court, the Appellants moved the Hon'ble Supreme Court where too the challenge was rejected. Consequently, the penalties were paid by the Appellants in 2011 and 2012. 3. The Learned Counsel for the Appellant argued that the case has been made out on the basis of the documents received from the Income Tax Department which are not admissible as evidence for the proceedings under FERA. He stated that the judgment of the Hon'ble Supreme Court in the case of KTMS Mohammad has held that FERA is a special law which prescribes a special procedure for investigation of violation of FERA, hence, the evidence obtained during the investigation under the Income Tax Act could not have been used for the proceedings ....
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....es against the accused persons. Therefore, the court discharged the three Appellants herein, in the Prosecution Complaint filed by the Respondent Directorate under FERA. Accordingly, he prayed that the three Appeals filed before the Tribunal may be allowed. 7. The Ld. Counsel for the Respondent argued that the Appellants challenge before the Hon'ble Supreme Court with respect to their applications for waiver of pre-deposit of penalty was rejected. It therefore appears that they failed to convince their case for undue hardship either on the basis of financial difficulty or on the basis of there being no prima-facie case against them. He further argued that in the present proceeding unlike those before the Ld. ACMM the matter is being adjudicated for the civil liability for which the standard of proof is that of pre-ponderance of probability and not that of proof beyond reasonable doubt. He relied upon the judgments of the Hon'ble Supreme Court in the cases of Standard Chartered Bank & Ors. v/s Directorate of Enforcement & Ors. [(2006) 4 SCC 278] and Radheshyam Kejriwal v/s State of West Bengal & Anr. [(2011) 2 SCC 581] to state that the proceedings of adjudication and the prosecu....
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....d out that the Explanation to Section 8 (1) of FERA also indicates that the transfer in such manner is deemed to be as lending of foreign exchange. He reproduced the provision as follows: "Explanation- for the purposes of this sub-section, a person, who deposits foreign exchange with another person or opens an account in foreign exchange with another person, shall be deemed to lend foreign exchange to such other person." 10. The Ld. Counsel for the Respondent stated that the overseas enquiry revealed that the premises in Hong Kong which was claimed to be of M/s Real Fact Enterprises was in fact occupied by another group of companies and there was no person by name of Shri Rakesh Saxena. The Appellant Shri Vikram Singh admitted the receipt of US $ 1 lakh from one Shri Rakesh Saxena who was non-existent hence it appeared that the Appellant had himself organized the remittance from his own sources and contravened the provisions of Section 8(1) of FERA. With regard to his directorship of the Appellant Company, even if his contention of having become Director of the Appellant Company on 01.01.1996 is accepted, it is an admitted case of the Appellant that he knew Shri Kothari....
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....w of the aforementioned statutory provision for allowing the use of the documents recovered during the proceedings under any other law, the objection against the use of the documents in the present case since these were recovered during the proceedings under the Income Tax Act, cannot be accepted. In this regard, the Hon'ble Supreme Court in the judgement dated 08.04.1992 in the case of KTMS Mohd. & Anr. v/s Union of India [1992 AIR 1831] held that the statements recorded under FERA could not be used for the proceedings under the Income Tax Act and not the other way round as is provided u/s 72 of FERA. The focus of the Hon'ble Supreme Court in the case supra was on the necessity to examine the statements so as to determine whether it was tendered voluntarily or not. In the present case, the Respondent Directorate has undertaken investigations under FERA, after the initial reference from the Income Tax Department. 13. The Hon'ble Supreme Court has held in the cases of Standard Chartered Bank & Ors. V.s Directorate of Enforcement & Ors. [(2006) 4 SCC 278] and Radheshyam Kejriwal vs. State of West Bengal & Anr., [(2011) 2 SCC 581] that the scheme of FERA make its clear that the adj....
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....n Investment in India in Housing and Real Estate Development which permitted NRIs/ OCBs to invest upto 100% in the new issue of equity shares/ convertible debentures of Indian companies engaged in real estate development. On perusal of the said para, it is clear that it is applicable to non-resident Indian and to Overseas Corporate Bodies. Shri J L Kothari is a US citizen has been clearly brought out in the impugned order as follows: "During the course of the proceedings, Sh. Ved Prakash, Advocate of Sh. Kothari emphasized that Sh. J L Kothari is a US citizen and had been engaged in business activities abroad and he had no business interests in India. This being so, the provisions of the FERA, 1973 were not appliable to him. Vide letters dated 18.12.2004, 20.12.2004 Sh. Kothari submitted copy of his US passport in confirmation of the submissions. Considering all the materials as discussed hereinbefore, I find that the charge against Sh. Jhanwar Lal Kothari in the SCN under consideration has not been proved." The nationality of Shri J. L. Kothari as US citizen has not been challenged by the Appellants. We also fail to appreciate that how issuance of shares, if any, by M/....