TaxTMI 
TaxTMI 
2025 (6) TMI 535
X X X X Extracts X X X X
X X X X Extracts X X X X
....9 r.w. Para 8 of Schedule 1 of Regulation 5(1) of Foreign Exchange Management (Transfer or Issue of Security by a person Resident Outside India) Regulations, 2000 6,00,000 3 Section 6(3)(b) of FEMA, 1999 r.w. clause 9(1)(A) of the said Schedule 1 to Regulation 5 of Foreign Exchange Management (Transfer or Issue of Security by a person Resident Outside India) Regulations, 2000 1,00,000 Total 17,00,000 2. As per the facts of the case, on receiving the specific information that the Noticee Company (present appellant) had entered into a land deal in Goa violating the provisions of FEMA, 1999. Enquiries were initiated against the noticee company. A directive dated 29.08.2008 was issued to Centurian Bank, Mapusa, Goa, calling for copy of Account Opening Form and the statement of the accounts. It was seen from the information forwarded by the Bank that the then Directors of the Noticee Company were Mr. Vladimir Koveshnikov and Mr. Andrey Kiriyanon, both Russian nationals. Each of them was having 500 shares of the company with a face value of Rs. 100/- each. The shareholding in the company was 100% non- resident. The paid-up capital of the company was Rs. 100....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ov, Director of the Company was recorded on 11.03.2010, u/s 37 of FEMA, 1999, wherein he stated that he was a Russian national and Director of the company. The company purchased plots and the said property was an agricultural land and no Sanad was obtained for conversion of land into non-agricultural land. The properties were purchased using Foreign Direct Investment with the present bankers, at HDFC Bank, Calangute Branch. The Office of the Collector, North Goa, District Goa vide their letter informed the Directorate that no conversion Sanad from agricultural to non-agricultural purpose was issued for the property held by the company at survey no. 373/4 and 373/5A, Anjuna Village, admeasuring 1150 sq. meters valued at Rs. 20,00,000/-. Shri Andrey Kiraynov, in his statement dated 11.03.2010 stated that the said property at Survey No. 373/4 and 373/5A, Anjuna was sold. Office of the Collector, North Goa, District Goa vide another letter informed the Directorate that the appellant company had applied on 03.05.2007 for conversion of property bearing survey no. 313/1 of Siolim Village for residential purpose and the matter was referred to Joint Secretary (DMU), Secretariat, Porvo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ricultural property and the company has applied for conversion of Sanad to the Collector. She pointed out that the Ld. Special Director erred in coming to the conclusion that the land purchased by applicant no.1 company is an "Agricultural property", only because the additional collector had stated that it has not issued conversion Sanad and thereby it is wrongly presumed that the applicant no.1 has contravened provisions of section 6(3)(b) of Foreign Exchange Management Act, 1999 r/w Item 6 of List B of Annexure A to Schedule-I of Regulation 5(1) of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. Ld. Counsel for the appellant contended that the Ld. Special Director ought to have considered that, in terms of section 30 of the Goa Land Revenue Code, there is no presumption in law that the all land in state of Goa are agricultural lands, unless they are specifically classified as "Agricultural Land". He submitted that the Ld. Special Director ought to have considered that, in state of Goa in terms of section 30 of the Goa Land Revenue Code 1968 "no land which is used for one non-agricultural purpose can be used for oth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the applicant no.1/noticee no.1 had satisfied all technical requirements of FEMA, 1999 and only certain documents which are incidental verification were not submitted due to inadequate knowledge of the same and there has been no intentional contravention of substantive provisions of law by the noticee, as the remittance actually belong to the Noticee No. 2 & 3 have been brought in through normal Banking Channels. Such minor lapses can be condoned by this Appellant Tribunal, being not appreciated by the Adjudicating Authority u/s 15 of FEMA. Coming to the alleged last contravention, Ld. Counsel for the appellant contended that Ld. Special Director ought to have considered that, as far as contravention of section 6(3) of Foreign Exchange Management Act, 1999 r.w. para 9(1)(A) of Schedule-I of Regulation 5(1) of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulation, 2000,r.w.s. 42(1) of Foreign Exchange Management Act, 1999 for Rs. 1,28,32,113/- by the Noticees. The Ld. Special Director ought to have considered that there is no dispute and the noticees have accepted in their reply to show cause notice that there has been a de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ir Koveshnikov and Andrey Kiraynov (500 equity shares of Rs 100/- each) and both of them were persons resident outside India and hence the company has violated the provisions of Section 6(3)(b) of FEMA, 1999 read with Para 8 of Schedule 1 of Regulation 5 (1) of Foreign Exchange Management (Transfers or issue of security by a person resident outside India) Regulations, 2000 to the extent of Rs. 100,000/-. Further it is submitted that as per Regulation 5Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, the payment for investment in India should come from abroad from the foreign investor himself, however, the remittance of Rs. 100,000/- against which shares were issued by the appellant Company had not come from Vladimir Koveshnikov and Andrey Kiraynov. Hence, both of them have violated the provisions of Section 6(2) of FEMA read with Regulation 5 of Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 for Rs. 50,000/- each. Further the said property at Survey No. 313/1 Goa purchased for Rs. 84,00,000/- by the appellant company is involved in the contravention as detailed above and thus, the said property is li....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. Further, site plan at page 190 reflects many constructed sites on Northwest side of this plot. Further, the letter dated 03.03.2011 issued by the office of Town & Country Planning Department, Government of Goa pertaining to land use zoning information at page 249 of appeal paper book reflects that the property bearing survey no. 313 Sub-division no. 1 of Siolim Village, Bardez Taluka admeasuring 8075 sq. mtr. is situated in settlement zone, as per the original plan for Goa 2001 AD. Thus, the said purchased plot being in the settlement zone area, it cannot be presumed to be agricultural land by any stretch of any imagination, as contended by Ld. Counsel for the Respondent ED. Hence, being a settlement land, appellant has not contravened the provisions of Section 6(3)(b) of FEMA, 1999 r.w. item 6 of List B of Annexure A to Schedule 1 of Regulation 5(1) of Foreign Exchange Management (Transfer or Issue of Security by a person Resident Outside India) Regulations, 2000. I also fortify my view in this regard in the light of para 6.1.1 of the Goa Land Development and Building Construction Regulations, 2010 which is reproduced as under: "6.1.1 The following Regulations shall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dmittedly, the appellant company received sum of Rs. 1,27,32,113/- from M/s Avitar Holding Group and M/s Oceania Transit Corp., but not in the name of Mr. Vladimir Koveshnikov and Mr. Andrey Kiriyanon. The contention of the Ld. Counsel for appellant the said two companies in fact belongs to the aforesaid, previous Directors is without any merit as the companies and the said two Directors are different persons in the eyes of law. Therefore, fine imposed on the appellant company qua the second contravention is hereby maintained. 7. Now, coming to the third issue, pertaining to Section 6(3)(b) of FEMA, 1999 r.w. clause 9(1)(A) of the said Schedule 1 to Regulation 5 of Foreign Exchange Management (Transfer or Issue of Security by a person Resident Outside India) Regulations, the clause 9(1)(A) is reproduced as under:- "9. (1) Report by the Indian company An Indian company issuing shares or convertible debentures in accordance with these Regulations shall submit to Reserve Bank, A) not later than 30 days from the date of receipt of the amount of consideration, a report indicating: i) Name and address of the foreign investors ii) Date of receipt of ....