TaxTMI 
TaxTMI 
2025 (8) TMI 503
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....esent Market Value 1. Flat no. 101 at Babylon Building, Matunga (E), Adenwala Road, Mumbai, M/s Balaji Universal Tradelinks Pvt Ltd M/s Vijay Dwellers 24.10.2007 Rs. 86,81,000/- Plus 8,02,850 (other expenses) Total Rs. 94,82,850/- Rs. 6 crores 2. Flat no. 102 at Babylon Building, Matunga (E), Adenwala Road, Mumbai, M/s Balaji Universal Tradelinks Pvt Ltd M/s Vijay Dwellers 24.10.2007 Rs. 86,81,000/- Plus 8,02,850 (other expenses) Total Rs. 94,82,850/- Rs. 6 crores 3. Flat no. 201 at Babylon Building, Matunga (E), Adenwala Road, Mumbai, M/s Balaji Universal Tradelinks Pvt Ltd M/s Vijay Dwellers 24.10.2007 Rs. 86,81,000/- Plus Rs. 8,02,850 (other expenses) Total Rs.94,82,850/- Rs. 6 crores 4. Flat no. 202 at Babylon Building, Matunga (E), Adenwala Road, Mumbai, M/s Balaji Universal Tradelinks Pvt Ltd M/s Vijay Dwellers 24.10.2007 Rs. 86,81,000/- Plus 8,02,850 (other expenses) Total Rs. 94,82,850/- Rs. 6 crores 5. Flat no. 301 at Babylon Building, Matunga (E), Adenwala Road, Mumbai, M/s Balaji Lifestyle Realtors Pvt Ltd M/s Vijay Dwellers 24.10.2007 Rs. 86,81,000/- Plus 8,02,850 (other expenses) Tot....
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....port no. 05/2010 dated 28.01.2009 under Section 173 Cr.P.C, 1973 before the Hon'ble Special Judge, Ranchi against Sh. Madhu Koda, and others. As per the said final report it is revealed that Binod Singha, Sanjay Kumar Chaudhary and the others opened number of Companies to enable Sh. Madhu Koda in investing his illegal income. He had amassed illegal assets in excess of his income from legal sources by misusing his position in the Jharkhand Government. He acquired disproportionate assets of his known and legal sources of income. In the meantime, the Hon'ble Jharkhand High Court vide order dated 04.08.2010 transferred investigation of the case from Vigilance Department to CBI. Accordingly, the CBI registered the FIR No. RC-5(A)/ 2010/AHD/ Ranchi dated 11.08.2010 and after conducting investigation filed charge sheet no. 06/2010 dated 12.10.2010 against S/Sh. Madhu Koda, Binod Sinha and Sanjay Kumar Chaudhary relating to specific instances of illegal gratification to the tune of Rs. 30 crores obtained by Binod Sinha and Sajay Kumar Chaudhary on behalf of Sh. Madhu Koda from M/s Core Group of Mumbai for getting approval and allotment of Iron Ore Mines in Jharkhand. Accordingly, the....
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....yman Advisory Services Pvt. Ltd. (06/12/2007), (vi) Radha Gopal Financial Services Pvt. Ltd. (15/04/2008), (vii) Akruti Diamonds Pvt. Ltd. (07/08/2008), (viii) Adarsh Diamond Pvt. Ltd. (07/08/2008), (xi) Trinetra Infra Con. Pvt. Ltd. (18.03.2008), (x) Kuber Diamonds (07/08/2008), and (xi) Incredible Exports Pvt. Ltd. (06/06/2008). e) This shows that only after Manoj Punamia and his cohorts came in contact with Sh. Madhu Koda and Binod Sinha, he started receiving undisclosed income of Sh. Madhu Koda and Binod Sinha, he started receiving undisclosed income of Sh. Madhu Koda since FY 2006-07. With that ill-gotten money, he set up large number of companies known as Balaji Group of Companies. f) The share-holding pattern of Balaji Life Style Realtors Pvt Ltd. and Balaji Universal Trade Links reveals that Manoj Punamia, Lata M. Jain and Vishal Information Technologies were share-holders. g) List of shareholders, subsequent changes in the share holdings and the Directors show that either they were controlled directly by Manoj Punamia or through his cohorts. Moreover, the share-holding-pattern of these companies reveals that Binod Sinha and Sanjay Chaudhary, clos....
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....seized and impounded revealed that all the bills, vouchers and communication letters have been signed either by Muknaram Vishnoi or Hemendra Bhai Patodia. Both these individuals are trusted lieutenants of Manoj Punamiya and thus it appears that the modus operandi in the case M/s KGN Gems and Jewellery was similar to that of M/s Suryam Gems and Jewellery LLC. n) The charts seized during the course of the search u/s 132 of the IT Act 1961 also showed that the main person/authorized signatory of the major importers and exporters of M/s Balaji Universal Tradelink Pvt. Ltd. and M/s Balaji Bullion and Commodities Pvt. Ltd. was Manoj Punamiya. This further strengthened the contention that all these companies were floated by Manoj Punamiya or his hawala operations. o) In addition to these, Manoj Punamiya and Balaji Group of companies along with Arvind Vyas, Binod Sinha, Sanjay Chaudhary, Dhananjay Chaudhary and Anil Bastawade had substantial investment abroad such as Dubai, Indonesia, Thailand and other parts of the world through associates and others. The sources of these investments were the monies received owing to their proximity with the then Chief Minister Sh. Madhu....
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.... to CBI in Writ Petition (PIL) 4700/2008, and accordingly, the CBI investigated the case after registering the FIR No. RC-5(A)/2010/ AHD/Ranchi against the accused Madhu Koda, Kamlesh Singh, Bhanu Pratap Shahi, Bandhu Tirkey. Present appellant companies were not named in the said FIR. After the investigation, CBI filed chargesheet on 12.11.2010 against the Sh. Madhu Koda, Binod Sinha and Sanjay Kumar Chaudhary. In the said final report, CBI calculated the proceeds of crime as Rs. 7.65 crores (Rs. 13 crores less Rs. 5.35 crores). Ld. Counsel for the appellant submitted that neither the appellant companies, nor its directors were named even in the said final report filed by CBI. Ld. Counsel for the appellants pointed out that on 23.07.2012, the Income Tax Assessment order dated 30.12.2011 with respect to Madhu Koda was communicated by Income Tax Department to the ED vide letter dated 17.07.2012. He pointed out that the prosecution complaint filed by ED on 01.07.2009 and Ld. Special Judge PMLA Court, Ranchi, after framing the charges commenced the trial in the said prosecution complaint filed by ED in ECIR No. 02/Patna/PAT/02/AD. He pointed out that after taking the cognizance in the ....
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....chargesheet. He also explained the source for acquiring the aforesaid properties by the appellant companies, as mentioned in detail in the written submissions. He further stressed that even otherwise the properties of the appellant companies cannot be attached just because one of its Director Manoj Punamiya was associated with Madhu Koda, as alleged by ED, though not admitted by him, in absence of any evidence that the appellant companies received any share from the proceeds of crime. In support of his contention, he relied upon the judgment of Hon'ble Supreme Court of India in the case of Vijay Madanlal Chaudhary Vs. Union of India, 2022 SCC OnLine SC 929, wherein it is held as under: "30. The other relevant definition is "proceeds of crime" in Section 2(1)(u) of the 2002 Act. This definition is common to all actions under the Act, namely, attachment, adjudication and confiscation being civil in nature as well as prosecution or criminal action. The original provision prior to amendment vide Finance Act, 2015 and Finance (No. 2) Act, 2019, took within its sweep any property (mentioned in Section 2(1)(v) of the Act) derived or obtained, directly or indirectly, by any person....
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....rson "as a result of criminal activity relating to the stated scheduled offence. To be proceeds of crime, therefore, the property must be derived or obtained, directly or indirectly, "as a result of criminal activity relating to a scheduled offence. To put it differently, the vehicle used in commission of scheduled offence may be attached as property in the concerned case (crime), it may still not be proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act. Similarly, possession of unaccounted property acquired by legal means may be actionable for tax violation and yet, will not be regarded as proceeds of crime unless the concerned tax legislation prescribes such violation as an offence and such offence is included in the Schedule of the 2002 Act. For being regarded as proceeds of crime, the property associated with the scheduled offence must have been derived or obtained by a person "as a result of" criminal activity relating to the concerned scheduled offence. This distinction must be borne in mind while reckoning any property referred to in the scheduled offence as proceeds of crime for the purpose of the 2002 Act. Dealing with proceeds of crime by way of any proc....
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....al proceeds of crime, irrespective of the quantification arrived by the Police/CBI. She pointed out that as per the ED investigation, the total proceeds of crime generated by the Manoj Punamiya, the Director of the present appellant companies being associate of Madhu Koda was to the extent of Rs. 138.18 crores and hence, the same cannot be limited to Rs. 21.42 crores. She further argued that proceeds of crime need to be assessed and quantified by respondent ED only and the role of Police/CBI is to limit its investigation qua the commission of predicate offence. She further contended that the legislative intent and the statutory framework of the PMLA ought to combat the offence of money-laundering, which is the process of making illicit gains to appear as legitimate gains. She further stressed that money-laundering begins after the commission of predicate offence. In the present case, the initial POC of Rs. 21.42 crores was merely the seed money. The subsequent acts of layering, integration and multiplication of these funds generated a far larger quantum of laundered assets. The attachment of the properties of the appellant companies to the tune of Rs. 138.18 crores out of Rs. 138.8....
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....vides powerful corroboration that the scale of the criminal enterprise was vastly larger than the initial Rs. 21.42 crores and that the ED's additional attachment is permissible as per law. The attachment of assets worth Rs. 138.80 crores (Rs. 138.18 wrt the appellants) is not an attachment of the initial bribe money or disproportionate assets of Shri Madhu Koda, but ramification of investigation. She argued that the scope of investigation of ED with respect to quantum of proceeds of crime is not limited to the final outcome of the investigation conducted by police/CBI. The Respondent ED cannot shut its eyes to the excess proceeds of crime found during investigation of the case while tracing out the trail of proceeds of crime, simply because the CBI has confined itself to the lower amount. The only ignition of investigation by ED is the registration of FIR/chargesheet by police/CBI qua the predicate offence, which is an undisputed fact. Prayer is accordingly made to dismiss the present appeal being devoid of any merits. 5. After hearing the rival submissions, the following issue emerge for decision in the present case. Whether ED has to confine its investigation to the ....