TaxTMI 
TaxTMI 
2025 (6) TMI 522
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....- 2. Immovable properties/residential flats situated at 901, Beaumonde, Prabhadevi, Mumbai-25, registered in the name of Shri Vishal J. Mehta having carpet area 2689.75 Sq. Ft. 17,76,50,000/- Total 35,53,00,000/- 2. As per the facts of the case, Central Bureau of Investigation, Bank Securities & Frauds Cell, Mumbai registered a case vide RC-BSM2014 E0004 dated 26.03.2014 on the basis of written complaint filed by Ashok Bansal, AGM, PNB against Jatin Rajnikant Mehta, Shri Ramesh Indulal Parikh, Shri Ravichandran Ramsami, Shri Harish Ratilal Mehta, Shri Pranav Ramesh Dalal, Vinod Kumar Rajendra Jain, Shri Bahilalbhai Kantilal Patel, Shri Hari Mohan Namdev, Shri Haytham Salman Ali Abu Obaidah, M/s Winsome Diamonds and Jewellery Ltd. (WDJL) and M/s Forever Precious Jewellery Diamond Ltd. (FPJDL) for commission of offence under Section 120B IPC read with 420 IPC and substantive offence thereunder: CBI BS &FC, Mumbai also registered several other FIR's for acts of criminal conspiracy for committing fraud with various banks on the basis of complaint filed by respective banks namely Oriental Bank of Commerce, State Bank of Hyderabad, Syndicate Bank, Canara Bank, Central Bank....
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....ennai and Cochin, converted them into coins and pendants and sold them in open market in order to siphon off gold in the garb of export to UAE based buyers. The complete cycle of import of gold and realization of sale proceeds was taking hardly 5-6 days, whereas they availed credit facilities upto 270 days in order to round trip the funds and show high turnover. On the basis of high turnover, they managed to avail enhanced working capital, induced the bank to part with the fund and siphoned off the money in the guise of loss in derivative trading by the buyers abroad and the proceeds were routed through bank accounts of various foreign companies and were ultimately routed into the accounts of various companies owned and controlled by Mrs. Sonia Mehta and Shri Suraj Mehta. As a result of criminal conspiracy and cheating by M/s WDJL, M/s. FPJDL and their Directors, Promoter Sh. Jatin, Mehta, Smt. Sonia Mehta, Shri Suraj J. Mehta, Mr. Haytham Salman Ali Abu Obaidah of UAE and unknown Public servants, have committed the offence of Money Laundering, as defined u/s 3 of PMLA, 2002, there has been wrongful loss to the banks, by the two companies' M/s WDJL and M/s FPJDL as mentioned in Tab....
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....l Noora Jewellery FZE, UAE, Alma Diamonds, Hongkong and others entities owned by Mrs. Sonia Mehta, wife of Shri Jatin R. Mehta and Shri Suraj Mehta, son of Shri Jatin R. Mehta. Therefore, on the basis of the material collected during the course of investigation and placed on record, it was imperative that the immovable properties as mentioned in the schedule, provisionally attached, considering the same in terms of 'value thereof', under Section 2(1)(u) read with Section 5(1) of the PMLA, 2002. (B) Brief facts regarding attachment of properties at Bharat Diamond Bourse, Bandra Kurla complex, a Mumbai registered in the name of M/s SRV Polished Diamonds Pvt. Ltd and M/s SJR Commodities and Consultancies Pvt. Ltd. Investigation has revealed that Shri Jatin R. Mehta was also having several group companies and the share holding pattern was as such that Jatin Mehta, his family members and other group companies are the shareholders in every Group Company. One of the Group Companies was M/s SRV Polished Diamond Companies Pvt. Ltd., which got its name through several successive changes from M/s Suraj UK Industries Ltd., M/s SJR Developers Ltd., M/s SJR Diamond and Jewellery Ltd. a....
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.... Mehta (HUF) 14600 5. Bombay Diamonds Company Pvt. Ltd. 100 6. Kohinoor Diamonds Pvt. Ltd. 24050 7. Firstrate Diamonds Pvt. Ltd. 6900 Total 50000 Subsequently, 01.04.2013 share holding pattern was changed as under investigation has revealed that in the during 2012-13, Mrs. Sonia Mehta, Shri Suraj Mehta and Shri Vishal Mehta were the shareholders in M/s SRV Polished Diamond Company Pvt. Ltd., but subsequently they transferred their shares in the name of their group companies. Share holdings of M/s SRV Polished Diamonds Pvt. Ltd. from 01.04.2013 to 31.03.2015 was as under: - Sr. No. Name of Shareholders No. of Shares 1. Jatin R. Mehta (HUF) 14600 2. L.S. Bhansali 50 3. Suraj Jewellery India Pvt. Ltd. 50 4. Professional Diamonds Pvt. Ltd. 24050 5. Suraj Diamond Industries Pvt. Ltd. 2050 6. Euro Auto Pvt. Ltd. (99% share held by Shri Jatin R. Mehta) 4600 7. Suraj Diamond Pvt. Ltd. 4600 Total 50000 On 01.04.2016, shareholding pattern of the said company was again changed and this time 48.1% of shares of M/s SRVPDPL (24060 shares) which were held by M/s Professional Diamonds Pvt. Ltd. were sold to one Ronak Maheshwari against total ....
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.... PDC INTERNATIONAL FZE 8/31/2015 SRV POLISHED COMPANY PVT LT 79934.86 PDC INTERNATIONAL FZE TOTAL 762041.45 During the course of investigation, it was revealed that following immovable properties situated at Bharat Diamond Bourse, BandraKurla Complex, Mumbai, are presently owned by M/s SRV Polished Jewellers Pvt. Ltd. (a) Office No. CE 5051, bearing 2458 shares under C/0577 share certificate and C- 324, C-325, C-326, C-417 to C-422, car parking space bearing shares 900 under share certificate No. P/0431 to P/0439, which was transferred vide Deed of Transfer No. 4/4010/2014 dated 11.06.2014 by M/s Su-Raj Diamond Industries Ltd. to M/s SRV Polished Diamonds Co. Pvt. Ltd. (b) Office No. CE 5052, bearing 2379 shares under Share Certificate C/0578, which was transferred vide Deed of Transfer No. 4/4011/2014 dated 11.06.2014 by M/s Su-Raj Diamond Industries Ltd. to M/s SRV Polished Diamonds Co. Pvt. Ltd. Vide letter dated 08.03.2018, Bharat Diamond Bourse, Mumbai has submitted copies of documents relating to the aforesaid properties. From the same it appears that Office No. 5051 and 5052 were allotted to M/s Kohinoor Diamonds Pvt. Ltd. by Bhar....
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....onds Pvt. Ltd. 11000 4. Bombay Diamonds Co. Pvt. Ltd. 06 5. Forever Diamonds Pvt. Ltd. 1000 6. Firstrate Diamonds Pvt. Ltd. 1050 TOTAL 24500 Subsequently, 01.04.2013 share holding pattern was changed as under and further continued: Sr. No. Name of Shareholder No. of Shares 1. Jatin R. Mehta (HUF) 11444 2. Suraj Diamond Dealers Pvt. Ltd. 1000 3. Suraj Jewellery India Pvt. Ltd. 11000 4. Euro Auto Pvt. Ltd. (99% share held by Sh. Jatin R. Mehta) 06 5. SRV Polished Diamond Companies Pvt. Ltd. 1050 TOTAL 24500 Again as on 01.04.2017, shareholding pattern was changed and other shareholders were introduced namely Harsha Jhaveri, Pratima Jhaveri and Ankit Jhaveri as under: Sr. No. Name of Shareholder No. of Shares 1. Jatin R. Mehta 11444 2. Cochin Art Jewellery Pvt. Ltd. 4000 3. Suraj Diamond Dealers Pvt. Ltd. 1000 4. Euro Auto Pvt. Ltd. (99% shares held by Sh. Jatin R. Mehta) 06 5. SRV Polished Diamond Companies Pvt. Ltd. 1050 6. HarshaJhaveri 3500 7. PratimaJhaveri 3500 TOTAL 24500 During the course of statement u/s 50(2) & (3) of PMLA, on 05.09.2018, Shri Kelkar was asked regarding the whereabouts of th....
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....arge Sheet, the POC was further layered through various overseas companies and ultimately converged in Bank Accounts of M/s Al Noora Jewellery FZE, UAE, Alma Diamonds, Hong kong and others entities owned by Mrs. Sonia Mehta, wife of Shri Jatin R. Mehta and Shri Suraj Mehta, son of Shri Jatin R. Mehta. Analysis of share holding pattern of the above discussed companies as well as the property transactions/ transfer of flats by Mrs. Sonia Mehta shows that the change in shareholding pattern/ownership was effected only to camouflage the real ownership of the properties mentioned in 'Schedule of properties above', owned by the said companies. Therefore, on the basis of the material collected during the course of investigation and placed on record, it was imperative that the immovable properties as mentioned in the schedule, provisionally attached, considering the same in terms of 'value thereof, under Section 2(1)(u) read with Section 5(1) of the PMLA, 2002. Accordingly, the properties of the appellants were attached vide PAO No.21/2018 dated 02.11.2018, as mentioned in Para No. 1 above. Thereafter, ED filed Original Complaint No.1062/2018 before the Adjudicating Authority. ....
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.... and remittance in respect thereto. a) Submission with regard to pre-conditions to invoke provisions of S.5 (1) of the act. b) submission with regard to mandatory requirement of recording 'reason to believe', c) submission with regard to requirement of establishing direct nexus or live link, d) Reliance was placed on (i) Mahanivesh Oils & Foods Pvt. Ltd. in (2016) SCC Online Del 475. (ii) J Sekar Vs. UOI in W.P. (C) 5320/2017 dated 11.01.2018 (iii) ITO Vs. Lakhmani Mewal Das 103 ITR 437 (SC) (a) Submission with regard to proceeds of crime (b) Reliance placed on (i) Vivek Mathias 96 taxmann.com 388 (ii) Jagati Publications Ltd. 92 taxmann.com 51 (iii) Himachal EMTA Power Ltd. in W.P. (C) 5537/2018 a) Submission that the Sale Deed would prevail over the order of provisional attachment b) Reliance placed on (i) Hamda Ammal v. Avadippa Pathar (1991) 1 SCC 715 (ii) Vannarakkal Kallalathil Sreedharan Chandramaath Balakrishnan (1990) 3 SCC 291. Ld. Counsel for the appellant further argued that the CBI has not filed any charge sheet with respect to FIR No.04/2014 dated 26.03.2014. However, CBI filed charge sheet with respect to subsequent FIR RC-15/2016 dated 23.09.2016 pertaining to compl....
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....asons to belief that the appellant is in possession of proceeds of crime and such proceeds are likely to be concealed, transferred or dealt with any manner which may result in frustrating any proceedings under the Act and thereby fulfilled the requirements of Section 5? In view of the detailed facts as mentioned in para no.02 above, like the registration of FIR against the accused persons, acquisition of proceeds of crime, by sending the remittance to foreign countries, layering the proceeds of crime in the name of the companies of the accused persons, and filing of the prosecution complaint during this intervening period, we are of the considered view that the said properties are rightly attached by the ED and confirmed by the Adjudicating Authority. This issue is accordingly decided against the appellants and in favour of ED. 7. Issue no. ii) to iv) are taken up together being interconnected, i.e., ii) Whether the impugned properties are acquired by the appellant using his legitimate source of income and thus, not 'proceeds of crime? iii) Whether the provision of value thereof for attaching the properties equivalent the value held within the country will be applicable with ....
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....sue has been given by the Delhi High Court in the case of Prakash Industries Ltd. v. Directorate of Enforcement reported in 2022 SCC OnLine Del 2087 and in this regard, Para 105 of the judgment in the case of Prakash Industries Ltd. (Supra) are quoted hereunder:- "105. It would be pertinent to recall that properties which were acquired prior to the enforcement of the Act may not be completely immune from action under the Act in light of what this Court had held in Axis Bank. As was explained by the Court in Axis Bank, the expression proceeds of crime envisages both "tainted property as well as "untainted property" with it being permissible to proceed against the latter provided it is being attached as equal to the "value of any such property" or "property equivalent in value held within``` the country or abroad". However, both the italicised categories would be liable to be invoked in cases where the actual tainted property cannot be traced or found out. It is only where the respondents are unable to discover the tainted property that they can take the statutory recourse to move against properties which may fall within the ambit of "value of any such property or "property equival....
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.... SCC OnLine SC 1586 (supra) has also been considered. It is pertinent to mention here that para 68 of Vijay Madanlal Choudhary v. Union of India (supra) has escaped the sight of Hon'ble Supreme Court of India in Smt. Pavana Dibbur v. The Directorate of Enforcement (supra) and in the subsequent judgment of Hon'ble High Court of Kerala, Ernakulam Bench, in case titled as, Davy Varghese v. Enforcement Directorate, W.P. (Crl.) 1354/2023 dated 16.12.2014. However, findings given by three judges Bench of the Apex Court in the Vijay Madanlal Choudhary v. Union of India (supra) has been relied to give interpretation to the definition. The investigation and chargesheet reveals that the impugned properties have been purchased by Sonia Mehta with her sons, who is are accused in the predicate offence and later transferred her share in these properties to her sons, i.e. Suraj Mehta and Vishal Mehta. Hence, these two properties can be attached as 'value thereof', even if those were purchased prior to the date of commission of the offence, as the proceedings under PMLA are independent of the predicate offence and once the proceedings are initiated, then the properties acquired prior to the da....