TaxTMI 
TaxTMI 
2025 (6) TMI 1435
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....ta No. 63, at Livesal Patti, Dist. Nainatal, Bheematal Banwali Road purchased on 24.07.1997 41,120/- 3. House No-A-38, Sec-27, Noida 36,91,351/- Total 1,28,10,439/- Movable Assets on Sh. Yadav Singh Sl. No. Particulars Amount 1. Balance in SB A/c No. 2817101040291, Canara Bank, Sec-6, Noida as on 09.02.2018 29,46,571/- 2. Inventory observed at A-10, Sec-51 Noida during the house search as on 05.08.2015 including cash of Rs. 36,325/- 44,97,655/- Total 74,44,226/- Sl. No. Immovable Assets of Smt. Kusum Lata Amount 1. House No.39/53, Nandpura, Agra purchased on 10.01.88. 12,839/- 2. Plot No.4, Amit Nagar, Deoli Road, Agra (measuring 14.6 sq. yard) purchased on 28.03.92 8,760/- 3. Plot No.5, Amit Nagar, Deoli Road, Agra (measuring 163 sq. yard purchased on 16.03.92 with cost of construction on this plot as well as adjacent plot no. 4, Amit Nagar. 38,42,240/- 4. Another land at plot No. 4, Amit Nagar, Deoli Road, Agra (measuring 167.22 sq. mtr, chak Soyam) purchased on 08.08.96 2,07,210/- 5. Plot No. A-10, Sec-51, NOIDA (350 sq. meter). Purchased on 28.07.2003 with ....
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...., Sikka Complex, Preet Vihar community center, Delhi purchased on 22.06.2011 vide deed no 9973 dt. 22.06.2011 from Sh. Rakesh Kumar Mahajan. 46,98,300/- 18. Part of office premises no. 9 and office premises 10 Sikka complex, Preet Vihar Community Center, Delhi purchased on 22.06.2011 vide Registration no. 9972 dt. 22.06.2011 from Sh. Rakesh Kumar Mahajan. 36,60,000/- Total 7,32,45,481/- Movable Assets of Smt. Kusum Lata 1. Balance in SB A/c No. 070720110014540, Oriental Bank of Commerce, Sec-27, Noida as on 15.02.2018. 40,086/- 2. Balance in SB A/c No. 2711101003566, Canara Bank, Sec-16, Noida as on 21.11.17. 9,489/- Total 49,575/- Assets of Kusum Garments Pvt. Ltd. Sl. No. Detail of Property Value as on 04.08.15 1. 1000 sq. mtr. Industrial Plot No. H-60, Sector-63 on dated 09.07.2003 4,65,91,109/- Assets of K.S. Ultratech Pvt. Ltd. Sl. No. Detail of Property Date of Registry Purchase Price 1. Flat No. 303, ON Third Floor, Measuring Area 620 SQ. Fts. i.e. 57.60 SQ. Mtrs, Having its Plinth/Covered Area 57.60 Sq. Mtrs. Bilt on Plot 28.04.2011 18,75,000/- No. 11, Building known as Savitri Sadan-1, Preet Vihar Community Ce....
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....ring the check period from 01.04.2004 to 04.08.2015 (on the date of search), the Appellant was found in possession of disproportionate assets in his name and in the name of his family members to the known source of his income, to the extent of Rs. 23,15,41,514/-, i.e. 512.66 %. Accordingly, ED recorded ECIR for conducting investigation against the said accused persons in possession of proceeds of crime and commission of offence of money laundering u/s 3 punishable u/s 4 of PMLA, 2002. Accordingly, ED provisionally attached the properties, as mentioned in Para No. 1 above, and thereafter, filed OC No. 983/2018 before the Adjudicating Authority for confirmation of the said properties. The Adjudicating Authority being satisfied with the allegations made in the Original Complaint, coupled with the other documents and statements recorded u/s 50 of PMLA, issued the Show Cause Notice to the defendants. After receiving the replied and hearing the rival submission, the Adjudicating Authority confirmed the PAO, vide Order dated 03.10.2018. Aggrieved by the said Order, the Appellants filed the present appeals. 3. During the arguments, Ld. Counsel for the Appellants submitted that no indep....
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....e acquired/purchased much prior to the said amendment? iv) Whether the attachment was made without the compliance/ existence of the conditions as stated under the second proviso of Section 5(1)? v) Whether requirements of Section 5(1)(a) & (b) are not fulfilled independent of and in conjunction before attaching the properties? Now, we will decide the above issues, one by one as under: Issue No. i) 6. Coming to the issue, we are of the view that the police/CBI has to conduct the investigation for the commission of the predicate/schedule offence and ED is not empowered to re-investigate the same. It has to see only the following points during its investigation for money laundering: - i) Prima facie incriminating evidence against the culprits for commission of the schedule/predicate offence; ii) Quantum of generation of proceeds of crime by commission of crime/predicate offence; iii) To check, whether the proceeds of crime are laundered, or likely to be laundered; iv) If proceeds of crime are laundered, then the mode of layering of the same, or the trail of POC; v) If proceeds of crime are already dissipated, then the other properties of the culprits which can be atta....
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....he PML Act for laundering of money acquired by committing the schedule offences prior to the introduction of the PML Act. Therefore, the time of commission of scheduled offences would not be relevant in the context of the prosecution under the PML Act. What would be relevant in the context of prosecution is the time of commission of the act of money laundering. The question would be, whether a person involved in money laundering as provided under Section 3 of the PML Act has indulged in the said act or not has to be decided by the competent authority. What is the date of laundering of money will have to be decided on facts of each case and there cannot be any prescribed straight jacket formula. This is an important fact which the authority will have to examine and it is a mixed question of law and fact. 78. A person acquiring assets through illegal means who comes before the society and claims that said money was acquired by proper means, then he would be guilty of the offence of money laundering. A person might have committed an offence long back and the proceeds of it is being placed, layered or sought to be integrated to the main stream of economy, then also, he is said to h....
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.... crime. 43. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money-laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money- laundering under the 2002 Act -- for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled o....
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.... 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 equivalent in value held within the country or abroad". To the aforesaid limited extent, properties purchased prior to 01 July 2005 may also become vulnerable and subject to action under the Act. However, enforcement action against such properties would have to satisfy the tests and safeguards as propounded in Axis Bank with the learned Judge observing that in such a situation it would have to be established that the person accused of money laundering had....
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....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. In the light of the above, we find no force in the argument of Ld. Counsel for the appellant, because when the proceeds out of crime was not available with the appellant rather vanished and siphoned off, (on account of high expenditure out of the ill- gotten money) the property of equivalent value can also be attached by ED. In the light of the aforesaid, second limb of the definition of "proceeds of crime" is also attracted to attach the property of equivalent value. Thus, the ground raised by the appellant cannot be accepted. Accordingly, issue no. ii & iii) are also decided against the Appellants and in favour of the Respondent ED. Issue No. iv) & v): 8. Both these issues are taken up together for analysis, being interconnected. As per Section 5 (1) of PMLA, 2002 : "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 recorded in writing), on the basis of material in his possession, t....