TaxTMI 
TaxTMI 
2025 (10) TMI 122
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....umbhal Mandaben Prakash Patil R/o 69-70, Jalaram Society, Dubhal, Surat. 50,000/- 12,77,800/- 2. Land admeasuring 1265 Sq. M. situated at plot No. 510-A, Village Palsana, District- Surat Confirmed only to the extent of 50% share. 1. Mrs. Anajanaben Adharbhai Borse R/o 125A, Avdhoot Dham Society, Dumbhai Taluka Choryasi, District - Surat. Mrs. Mandaben Prakash Patil R/o AvdootDham Dumbhal, Choryasi, Surat 4,90,000/- 24,70,515/- 3. Land admeasuring 25.9 Sq. Mtrs in the east of plot No. 17, 18 & 19, Adarsh Bunglows, Block No. 145/B, Palsana, Surat Mandaben Prakash Patil R/o 69-70, Jalaram Society, Dubhal, Surat. 3,09,000/- 44,15,037/- 4. Land admeasuring 40.29 Sq. M. situated at plot No. 22, Block No. 508, Ta, Palsana, Dist. Surat Mandaben Prakash Patil R/o 69-70, Jalaram Society, Dubhal, Surat. 35,000/- 37,030/- 5. Land admeasuring 40.29 Sq. M. situated at plot No. 23, Block No. 508, Palsana, Dist. Surat Mandaben Prakash Patil R/o 69-70, Jalaram Society, Dubhal, Surat. 35,000/- 37,030/- 6. Land admeasuring 40.29 Sq. M. situated at plot No. 24, Block No. 508, Ta, Palsana, Dist. Surat Mandaben Prakash Patil R....
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....Ld. Counsel for the Appellant pointed out that in the present case FIR was registered against Shri Prakash Raghunath Patil, for possession of disproportionate assets amounting to Rs.4,89,46,523/- at Kadodora to the known sources of income on 13.10.2016 for the check period 01.01.2008 to 31.03.2016. He pointed out that Appellant Mandaben Prakash Patil is the wife of accused Shri Prakash Raghunath Patil. He pointed out that the Appellant Mandaben Prakash Patil is already discharged in DA case vide order dated 19.05.2021 by Ld. Session Judge, Ahmedabad, wherein she was shown as abettor. Ld. Counsel for the Appellant stressed that she has no connection with the alleged crime committed by her husband. She is not a public servant. She explained the income during the investigation conducted by police, as well as by ED, however, same was not considered. He pointed out that later-on another FIR was registered against the Appellant for fabrication of income records to explain the sources of income and said FIR is also quashed by Hon'ble High Court vide order dated 29.09.2017 in Cr Misc Appl. No. 24313/2017. He pointed out that the Appellant Mrs. Mandaben was working in M/s Ideal Computer ....
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.... does not have regular and genuine source of income as claimed by her, and they even have failed to produce any concrete evidence in support of their claim. Regarding working of the Appellant Mandaben Patil and her income from M/s Ideal Computer Education, she has failed to produce any appointment letter, or other documentary evidence. The same is also revealed by present owner of M/s Ideal Computer Education, Mr. Harshad Patel and Mr. Akhtar Ahmed Sheikh faculty of M/s Ideal Computer Education, who stated that they have never seen the appellant working at the Centre. Late Mr. Ramesh Patil, the owner of Computer Centre, who happens to be a known person arranged to show merely on paper, Mandaben Patil to be working as supervisor in the institute and arranged his ill-gotten money paid into her account by way of cheque. Ld. Counsel stressed that during investigation under PMLA, 2002, it is clearly established on the basis of POC and trail of money that the properties were acquired by Mr. Prakash Raghunath Patil in his wife's name and in the name of his son Mr. Pankaj Patil, whose property is still under investigation and were purchased out of the proceeds of crime. The claim of the....
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.... 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 attached, in absence of direct/ indirect POC; vi) To check, whether the claimants of attached properties are genuine, or part & parcel of conspiracy. The first two points can be inferred by the ED on the basis of allegations made in the FIR and/or Police report under Section 173 CrPC. The ED has to confine its inquiry/ investigation qua the remaining four points mentioned above. Accordingly, we are of the view that ED is not required to conduct any investigation for the predicate offence. ED can only point out any glaring mistake, or lacunae in the said investigation conducted by police/CBI, which may come to its knowledge while conducting the investigation under PMLA. However, ED cannot arrive at different conclusion qua the predicate offence and quantum of fraud/....
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....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 have committed the offence of money laundering. Incorporation of certain offences in the Schedule is to bring it within the net of PML Act namely, proceeds of that crime within the provisions of the Act. For constituting an offence under Section 3 of PML Act, it is the connection of transaction to proceeds of crime which is sufficient and not the crime." The relevant date to find out offence of money laundering is when proceeds is projected to be untainted property. The issue aforesaid has been decided even in the case of Hon'ble Telangana High Court, in Vem Krishna Keerthan vs Directorate of Enforcement reported in CRIMINAL PETITION No.9314 of 2022, wherein it is held that- "38. In respect of the second argument, it should be borne in m....
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....g 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 offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause (ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all." It would also be gainful to refer to the definition of "proceeds of crime" given under Section 2(1) (u) of the Act of 2002 and is quoted thus- ....
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....it 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 an interest in such property at least till the time that he indulged in the proscribed criminal activity. The learned Judge further observed that bona fide rights acquired by third parties prior to the commission of the predicate offense would stand saved." Further, this Tribunal has also given an elaborate judgment on the issue in the case of Sadananda Nayak v. The Deputy Director, Directorate of Enforcement, Bhubaneswar in FPA-PMLA-5612/BBS/ 2023 delivered on 14.10.2024, where all the judgments on the issue have been considered and thereby this issue was decided in favour of Respondent ED. Further, in view of the para 68 of the judgment of Hon'ble Supreme Cou....
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....eeds of crime as 'value thereof' can be attached. Thus, this property at serial no. 1 can also be attached. Further, the 50% sale consideration qua the property at Serial No.2 was tendered by way of cheque issued by the appellant Mrs. Mandaben Patil and the remaining 50% in cash while execution of sale deed dated 11.11.2008 and the same is partially attached only for the share of Mrs. Mandaben, and the same was purchased in the year 2008-09 jointly by Mrs. Mandaben and her mother Mrs. Anjanaben, via sale deed dated 11.11.2008. Mrs. Mandaben paid a sum of Rs. 2,00,000/- by a cheque dated 16.09.2008 from her ICICI Bank Account no. 624601530524 and balance amount was paid by her mother in cash. However, upon scrutiny of bank account of Mrs. Mandaben, it was found that she deposited a total of Rs. 1,96,000/- by way of cash of Rs. 49,000/- each on 17.09.2008, 18.09.2008, 19.09.2008 and 20.09.2008, which is around the time of cheque payment, but she failed to explain the source of the cash. Also, the amount of Rs. 2,00,000/- was debited from her account on 10.10.2008. Hence, it is evident that the cash which she deposited in her bank account was her husband's illegal money and she ....
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....f attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in 1 [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act." In the matter at hand, there is ample evidence available from the investigation against the appellant Smt. Mandaben Pr....
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....5,000 46 20.04.2013 30,000 Total 11,76,000 The plea of the appellant that she used to take a salary of Rs. 10,000, which was later on increased to Rs. 15,000 is not reflected in her bank statement, as there is not even a single entry of Rs.10,000 and multiple entries of Rs.15,000 in the same month. The plea of commission for admission of students is also not corroborated in any manner as she used to receive heavy entries from February 2008 to August 2010 in a routine manner irrespective of the session for admission. The defence of the appellant is also falsified by Mr. Harshad Patel of M/s Ideal Computer and Mr. Akhtar Ahmed Sheikh faculty member. Further, it is revealed that during investigation under PMLA, 2002, it is clearly established on the basis of POC and trail of money that the properties were acquired by Mr. Prakash Raghunath Patil in his wife's name and in the name of his son Mr. Pankaj Patil, whose property is still under investigation and were purchased out of the proceeds of crime. The claim of the Appellant and merely quoting and declaring some figures as cash in hand, salary from different sources viz. Cookery class etc. are nothing, b....