TaxTMI 
TaxTMI 
2024 (9) TMI 1687
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....lash I, New Delhi - 110048 Sh. Irfan Ahmed Siddiqui 30,00,000 30,00,000 2 C-21, Lower Ground Floor, Panchsheel Enclave, New Delhi - 110017 Sh. Irfan Ahmed Siddiqui 60,00,000 60,00,000 3 Flat No. 401, 4th Floor, Sharnam Sunrise, Plot/Block No. 70, Survoday Co-op Society Ltd. Gujarat Sh. Irfan Ahmed Siddiqui 24,51,000 24,51,000 4 99,000 Shares of JOVOF DESIGNING COUTURE TECHNOLOGIES PVT. LTD. Sh. Irfan Ahmed Siddiqui 9,90,000 9,90,000 5 10,000 Shares of Yes to shine Private Limited Sh. Irfan Ahmed Siddiqui 1,00,000 1,00,000 6 Saving Bank, A/C No. 0065001050556 with ICICI Delhi Bank, Vasant Vihar Branch, New Delhi Sh. Irfan Ahmed Siddiqui 37,040 37,040 7 Saving Bank, A/c No. 90482010052901 with Canara Bank Green Park Ext. Branch, New Delhi Sh. Irfan Ahmed Siddiqui 1,670 1,670 8 Saving Bank, A/c No. 52310480287 with Standard Chartered Bank, Greater Kailash Branch, New Delhi Sh. Irfan Ahmed Siddiqui 5,860 5,860 9 Saving A/c 159810093566 with Induslnd Ahmed Bank, Vasant Vihar Branch, New Delhi Sh. Irfan Ahmed Siddiqui 5,177 5,177 10 Current A/c No. 002905....
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....bank. The area of manipulation of the main accused has been reflected in the impugned order and for ready reference, it is quoted hereunder: "In the following areas the manipulation was very substantial namely a) Reporting of turnover of the companies. b) Reporting of investments in capital goods (fixed assets) in companies" c) Taxes to be paid on the manipulated turn over. The following methods were used to adjust the bogus turnovers: d) Bogus sales to farmers of Dicalcium Phosphate (in cash): a) Bogus sales to own benami companies in India. b) Bogus sales to own benami companies in Dubai. c) Bogus inflation of export value to related entity Richmond Overseas in UAE." So far as the appellant is concerned, he is recipient of the amount of the proceeds of crime and accordingly attachment of properties in the hands of the appellant for the amount equivalent to the proceeds of crime has been made though the appellant had received part of the proceeds of crime. Arguments of the learned counsel for the Appellant: The learned counsel for the appellant submitted that despite the appellant being not n....
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....f the fact that any corporate entity or for that any client could take legal assistance from the professional person and if any amount is paid towards the fee, it cannot be considered to be proceeds of crime and accordingly prayer was made to set aside the impugned order. The learned counsel for the appellant further submitted that the impugned order of attachment should be treated to have lapsed on the expiry of period of 365 days from the date of order because investigation has not been completed as yet. The mandate of Section 8(3)(a) is for continuance of the attachment during the currency of the investigation to be completed within 365 days or the pendency of the proceedings related to offence under the Act, 2002. Since, prosecution complaint has not been filed within 365 days, impugned order is to be treated as lapsed. The prayer was accordingly made to set aside the order. Arguments of the Respondent: The learned counsel for the respondent has contested the appeal on legal as well as factual grounds. It is submitted that though the appellant has not been named as an accused either in the FIR or in the ECIR but his property has been attached begin recipient of the pro....
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....of the amount towards the professional charges. It is when the statement of the appellant was recorded u/s 50 of the Act, 2002 on 30.07.2019 and 31.07.2019. As per his statements, he interacted only with accused i.e. Chetan Jayantilal Sandesara and he did not interact with any other person for legal advice which included even any officer of the legal department. It is also a fact that the appellant did not handle any litigation work of the accused company. The fact aforesaid was accepted by the appellant in his statement. The statement of the appellant itself is sufficient to show that he had taken a lame excuse to justify the receipt of the amount from the accused. For someone giving legal advice, references of it could be given but when appellant himself had admitted that he never interacted with any person of legal department rather other than the accused, he did not meet anyone else. The amount received by the appellant was not a small amount rather it was Rs. 2,07,25,500/- even as per the statement of the appellant. The aforesaid amount towards alleged legal advice could not be substantiated and therefore respondents rightly arrived at the conclusion it to be the proceeds of c....
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....65 days. Section 8(3)(a) of the Act provides for thecurrency to the order of attachment during the investigation to be completed within 365 days or the pendency of the proceeding in a court relating to any offences under the Act of 2002. The period of interim order precluded the respondents to file the prosecution complaint cannot be taken to the benefit of the appellant and thereby we are unable to accept the arguments of the appellant regarding lapse of the order of provisional attachment or as to its confirmation. The explanation to Section 8(3) of the Act, 2002 has been ignored by the appellant which excludes the period of an interim order of the court from the period of 365 days. The argumentis that prosecution complaint has not been filed against the appellant after investigation. Section 8(3)(a) does not postulate investigation against the person whose property has been attached or even the criminal proceedings against such person, rather what has been provided is for continuance of the attachment till completion of investigation within 365 days or during the pendency of the proceedings for the offence under the Act of 2002. The pendency of the proceedings again does not ....
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.... whose property has been attached or seized. It does not mandate even investigation against the person whose property has been attached or seized and pendency of the proceedings against him in a Court of law rather what is required is the investigation and pendency of proceedings relating to "ny offence" under this Act. Further, section 5(1) refers to "any person", which would include even those who have not been charged for an offense, however, are in possession of the proceeds of crime. The interpretation of "any person" under section 5 cannot bekept limited to the „accused‟ who has been charged with an offence. It is wide enough to include persons who are in possession of the proceeds of crime, irrespective of whether they are accused or not.The plain reading of section 5(1) read with section 8(3)(a) supports the finding. For better elucidation, we are reproducing the section 5(1)herein below: "Section 5(1). Attachment of property involved in money-laundering.- (1)Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be re....
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.... does not refer to the investigation against the person whose property has been attached so as the criminal proceedings. Attachment of property from third party can be when the accused involved in predicate offence has parked it with such person or it was arranged in such a manner where proceeds of crime may not remain in the hands of the accused so as to be attached but to be kept with other person not involved in the crime. Since the emphasis is to attach the proceeds of crime, it is not necessary it to be from the accused but wherever it exists, the attachment can be made. In view of the above, bare reading of the provision does not support the argument raised by the appellant. The judgement of the Apex Court in the case of Vijay Madanlal Choudhary (supra) has otherwise clarified that attachment and seizure of the property and document can be from a person other than an accused and if that is so where would be a question of investigation against such person not named as accused or any proceeding in the court relating to the offence under the Act. When there is no necessity that property attached or seized should be from the accused, the question of completion of investigat....
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....he Act of 2002 to reach the proceeds of crime in whosoever name they are kept or by whosoever they are holding it. Reference of the judgment in the case of Attorney General for India &Ors. vs. Amratlal Prajivandas & Ors. (1994) 5 SCC 54 has been given. In this regard, Paras 65, 68 and 69 of the judgment of the Apex Court in the case of Vijay Madanlal Choudhary (supra)are quoted hereunder: "65. As aforesaid, in this backdrop the amendment Act 2 of 2013 came into being. Considering the purport of the amended provisions and the experience of implementing/enforcement agencies, further changes became necessary to strengthen the mechanism regarding prevention of money-laundering. It is not right in assuming that the attachment of property (provisional) under the second proviso, as amended, has no link with the scheduled offence. Inasmuch as section 5(1) envisages that such an action can be initiated only on the basis of material in possession of the authorised officer indicative of any person being in possession of proceeds of crime. The precondition for being proceeds of crime is that the property has been derived or obtained, directly or indirectly, by any person as a result o....
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....n not necessarily an accused. In case, the argument of the appellant is to be accepted, the same would render to defeat intention of the legislature and frustrate the object of the Act. In light of the above, the argument that the appellant has not been named as an accused in the FIR or ECIR would not be of any consequence as ultimately what is relevant is the property that was seized being "proceeds of crime". An example in reference to it has been given in preceding paras. If the argument of the appellant is accepted, then it would become very convenient for the accused to park the "proceeds of crime" with third person not involved in the crime and in that case, the third person being not accused would always raise a plea that property with him could not have been subjected to attachment. In the instant case, the accused Nirmal Kumar Kejriwal knowing it well that property with him may become subject matter of attachment or seizure gifted it to his grandson much after the registration of FIR and ECIR. The aforesaid cannot be considered to be bonafide rather designed to circumvent the provisions of law and the case registered against the accused. In view of the above, we are unable....