TaxTMI 
TaxTMI 
2026 (3) TMI 32
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....Delhi Police by way of FIR No. 416/2016 dated 29.11.2016 under Section 420 read with Section 120-B of IPC. The Respondent Directorate lodged an ECIR No. ECIR/11/DLZO/2016 dated 30.11.2016 against various persons. The Appellant herein has neither been named in the said FIR nor in the ECIR registered by the Respondent. 3. Ld. Counsel for the Appellant submitted that the Respondent issued the Provisional Attachment Order No. 11/2017 dated 06.10.2017 whereby the Respondent provisionally attached a sum amounting to Rs. 63,46,408/-. The said amount is cumulative total of amounts in the bank accounts of the Appellant, of the Companies (Murthal Fabrication Pvt. Ltd. and MMC Contractor Pvt. Ltd.) wherein the Appellant is a Director, of the proprietorship concern of the Appellant and of a joint account maintained by the Appellant and his wife. 4. Ld. Counsel for the Appellant submitted that the PAO passed by the Respondent as well as the Impugned Order dated March 26, 2018 ("Impugned Order") passed by the Ld. Adjudicating Authority are arbitrary orders whereby the bank accounts of the Appellant have been attached, without any cogent reason or&n....
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...., Murthal Fabrication Pvt. Ltd. Rs. 15,00,000/- and MMC Contractors Pvt. Ltd. Rs. 35,00,000/-. The Appellant illegally converted his unaccounted money and received back Rs. 1 crore in the form of RTGS in the accounts of his Firm and Company. The Appellant also became party to the criminal activities relating to the scheduled offences. Property to the extent of Rs. 1.25 crore was used in the commission of the scheduled offence and also in the commission of the offence under PMLA. 9. Ld. Counsel for the Respondent submitted that the argument of the Appellant that his actions were at the worst, contravention under the Income Tax Act is not acceptable. The same aspect is already dealt with by the Ld. Adjudicating Authority. Even though the Appellant has stated to have paid the taxes and deposited the money in accordance with Pradhan Mantri Garib Kalyan Yojna, the same would not absolve the Appellant from the application of the provisions of PMLA. There is no such immunity conferred in law. 10. Ld. Counsel for the Respondent submitted that the term proceeds of crime is defined very widely. It would also cover the value of such proceeds of crime. Hence, where the proceeds of crime ....
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....son besides facing the consequence of provisional attachment order, may end up in being named as accused in the complaint to be filed by the authorised officer concerning offence under section 3 of the 2002 Act." 13. The material on record, demonstrates that post demonetization, the Appellant handed over a sum of Rs. 1.25 crore in demonetized currency to Shri Mohit Garg. After deduction of commission by the intermediaries, an amount of Rs. 1,00,00,000/- was routed back to the Appellant in the form of RTGS transfers into the accounts of his proprietorship concern and Companies, namely Flour Milling Engineers Consultant, Murthal Fabrication Pvt. Ltd. and MMC Contractors Pvt. Ltd. The said transactions indicate a clear mechanism whereby demonetized currency was placed, layered and ultimately integrated into the banking system. Routing of such funds, prima facie, constitutes involvement in the process and activity connected with the proceeds of crime as contemplated under Section 3 of the PMLA. 14. The plea of the Appellant that, the amounts involved were "business accumulated unaccounted cash" and that the same would only attract proceedings under the Income Tax Act is misconcei....
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....elated to the Appellant being reflected as amounts of legal tender. The attachment of bank balances in the present case, therefore, cannot be faulted on this ground. 18. In this regard vide Final Order dated 14.10.2024 of this Tribunal in Appeal No.FPA-PMLA-5612/BBS/2023 in the matter of Shri Sadananda Nayak Vs. The Deputy Director, Directorate of Enforcement, Bhubaneswar has elaborately dealt with the issue of the interpretation of the definition of proceeds of crime given in Section 2(1)(u) of PMLA. The relevant paragraphs have been quoted as follows: - "To analyze the issue, we may quote the definition of "proceeds of crime‟ given under Section 2(1)(u) of the Act of 2002, which is quoted thus.: "(u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad; Explanation. For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derive....
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.... The argument has been made in reference to the judgment of Kerala High Court in the case of Satish Motilal Bidri (supra) and the judgment of Apex Court in Pavana Dibur (supra) to hold that the properties acquired prior to commission of crime would not fall in the definition of "proceeds of crime". We are unable to accept the arguments which may otherwise make second part of the definition of "proceeds of crime" to be redundant. It would be for the reason that if the definition is taken only in two parts leaving the middle part, then it would be difficult for the enforcement agencies to protect the property till completion of the crime to save the victim from crime committed by the accused. It would be for the reason that if the property acquired prior to commission of crime would not fall in the definition of "proceeds of crime", then the accused would commit the crime and immediately proceeds would be siphoned off or vanished so that it may not remain available for attachment. In fact, the word "the value of any such property" was inserted by the legislature to attach the property of equivalent value, if the proceeds out of commission of crime is not available or vanished. If the....