TaxTMI 
TaxTMI 
2025 (3) TMI 1624
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....to Rs. 59,58,172/-. This charge relates to the deposit in cash in the international credit card account of the American Express Platinum Card No.37448875501000 of the Appellant. A penalty of Rs. 17,87,000/- was imposed on the Appellant. (b) Section 5 read with the Foreign Exchange Management (Current Account Transaction Rules) 2000 notified by the Government of India vide Notification No. GSR 381(E) dated 03.05.2000 to the extent of US $ 3,35,508.26 equivalent to Rs. 1,34,20,330/-. This charge relates to the expenditure made by the Appellant from his International Credit Card. A penalty of Rs. 40,26,000/- was imposed on the Appellant. (c) Section 3(a) and Section 4 to the extent of AED 340025 and US $ 250034 equivalent to Rs. 1,34,01,610/-. This charge relates to the amount credited in cash as specified in AED in the personal account No.20410105175918 in Habib Bank, Zurich, Dubai and as specified in US $ in personal account No.22071741 with ABN Amro Bank, Dubai. Both the personal accounts were of the Appellant. A penalty of Rs. 40,20,000/- was imposed on the Appellant. (d) Section 6(3)(a) read with Regulation 18 of Notification No. FEMA/RB-19/2000 dated 0....
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....nt in India given in Section 2(v) of FEMA it is obvious that in order to determine whether a person is resident in India or not, it is important to consider 'his intention to stay in or out of India for an uncertain period'. He argued that from the factual matrix, as summarized in the preceding Paragraph 4 of this Order, the inference that the Appellant even though having moved out of Dubai in May, 2000 had the intention of going back to Dubai is obvious. He therefore pleaded that the Appellant cannot be treated as person resident in India. Consequently, the charges which have been found to be proved in the Impugned Order cannot hold good. 6. Ld. Counsel for the Appellant argued that the principles of natural justice have been violated in as much as the documents which were requested were not provided. He also stated that the cross examinations of the concerned persons were also not allowed. Ld. Counsel argued that there is no evidence or even an allegation that the funds for which the Appellant has been found in contravention were part of any compensatory payments sent for or made in India. He stated that the Ld. Adjudicating Authority has dropped three charges involving total ....
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....Counsel for the Respondent stated that the Appellant had indulged in these transactions while being a resident in India in contravention of FEMA provisions. 9. Ld. Counsel for the Respondent further argued that the Appellant had no explanation as to the source of fund which was deposited in the accounts of the International Credit Card and of M/s Bhosale Trading Company. Ld. Counsel argued that there is no documentary evidence as to show that Shri Ali Asghar made cash payment of US $ 1,48,954.29 in the account of the International Credit Card of the Appellant from the loan extended to him by the Appellant when he was resident in Dubai. He argued that the repayment of the purported loan was effected as late as 2006 which was after 5 to 6 years after the purported advancement of loan. There is no explanation as to the source of cash deposit. In fact, he questioned the logic of the contention that the Appellant even though having returned from Dubai could be regarded as non-resident. There was no evidence on record to show that the Appellant was actively associated with any business abroad. Ld. Counsel for the Respondent contended that the expenditure of amount US $ 3,35,508.26 mad....
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....ndia for more than one hundred and eighty-two days during the course of the preceding financial year but does not include- (A) a person who has gone out of India or who stays outside India, in either case- (a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; (B) a person who has come to or stays in India, in either case, otherwise than- (a) for or on taking up employment in India, or (b) for carrying on in India a business or vocation in India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; (ii) any person or body corporate registered or incorporated in India, (iii) an office, branch or agency in India owned or controlled by a person resident outside India, (iv) an office, branch or agency outside India owned or controlled by a person resident in India;" Reading of the Sub-Section makes it obvious that th....
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....rregnum period from May, 2000 to October, 2006. We note that the interregnum period almost covered 5 and half years. 14. There is nothing on record as to show the number of days in each Financial Year during the said period that the Appellant stayed in India. The very fact that the Appellant ultimately continued staying in India and at least from October, 2006, he was undisputedly a person resident in India is that circumstance which cannot be ignored in indicating his intention to stay in India for an uncertain period. The factual matrix presented by the Appellant cannot lead to an inference otherwise that he did not have intention to stay in India for an uncertain period, in view of the language of the statute as given in Sub-Section 2(v) of FEMA. There is no better circumstance to indicate the intention than what actually had transpired. By making choice to remain in India his intention becomes clear to stay in India for an uncertain period. The facts about his having resident/business Visa of Dubai, having business company in Dubai and his bank accounts in Dubai during the aforementioned interregnum period cannot therefore be regarded as relevant circumstances to indicate th....
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....if in fact, such a request specifying the persons to be cross-examined with the reasons for doing so was made. It may be kept in view that a number of opportunities were given for holding personal hearings during the course of the adjudication proceedings. 17. We note that the Ld. Adjudicating Authority has held five contraventions of FEMA to be proved out of eight charges of contraventions made against the Appellant. In four out of five charges which have been held to be proved, the deposit of money in the accounts relating to the International Credit Card, personal accounts and accounts of M/s Bhosale Trading Company, Dubai were made in cash for which the only explanation offered was repayment of the loans which the Appellant had extended to his friends and business partners. We note that no proof documentary or otherwise, except for the bare statements, has been furnished as to demonstrate that such loan was in fact extended by the Appellant during his stay in Dubai. Moreover, no proof has been submitted to substantiate the claim about the repayments having been made by friends and business partner as cash deposits in various accounts. 18. The first of the charge which was....
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....it is imperative to conclude and confirm that the cash deposit of US$ 1,48,954.29 is derived by the noticee through dealings in foreign exchange undertaken by him with person(s) other than authorized person in foreign exchange. Similarly, the facts of the case further confirm that the foreign exchange represented through the amount US$ 148,954.29 was acquired and held by the noticee, while he was residing in India" We also observe that even during the Appellate proceedings, no proof, documentary or otherwise has been produced which can substantiate that in fact such loan was extended and repayment thereof as cash deposit was made in such manner. 19. Ld. Adjudicating Authority has found the charge u/s 5 of FEMA r/w Foreign Exchange Management (Current Account Transaction) Rule, 2000 to the extent of US$ 3,35,508.26 (Rs. 1,34,20,330/-) as proved. In this regard, the finding made by the Ld. Adjudicating Authority in Para 4.2(xii) of the Impugned Order is reproduced as follows: 4.2(xii) It is noticed from the facts brought on record that, the utilization of funds in the said international credit card from 3.11.2006 onwards resulting in the subject spending of US$3,35,508....
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....ough cash deposits and also withdrawal of the amounts and its re-deposits in cash, to account for the subject cash deposits made in the personal bank accounts, no credence can be placed on these admissions given by the noticee in his statements, which incidentally was cited by the noticee as his sole evidence to prove this contention. Thus, the facts go to confirm that, the amounts of AED3,40,025 & US$ 2,50,034 representing the cash deposits made in the personal bank accounts of the noticee, were acquired by the noticee through dealings with persons other than authorized person in foreign exchange and that he had acquired and held these foreign exchange abroad, while being a person resident in India. In view of the above facts, I am convinced that the charges framed against the noticee are proved and established beyond doubt. I therefore hold the noticee guilty to the charges. Accordingly, in terms of the powers conferred on me u/s 13(1) of FEMA, 1999 I order to impose a penalty of Rs. 40,20,000/- (Rupees Forty Lakhs and Twenty Thousand charges. only) on the noticee for the aforesaid charges." We agree that the explanation about the cash deposits in personal accounts of the Appe....
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....ld him guilty to the charge and in terms of the powers conferred under section 13(1) of FEMA,199 I order to impose a penalty of Rs. 80,89,000/-(Rupees Eighty Lakhs and Eighty Nine Thousand only) on the noticee for the aforesaid charges. While deciding the aforesaid quantum of penalty, I have also considered the fact the noticee was only one of the partners in the captioned company." We agree with the finding that for the cash deposit made there is no acceptable explanation in the absence of documentary proof of the cash deposits having been made in the accounts of M/s Bhosale Trading Co., Dubai as repayment of the past loans. 22. The last of the charge which has been held as proved in the Impugned Order relates to contravention of Section 6(3)(a) of FEMA r/w Regulation 18 of Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulation, 2000 to the extent of AED 1,47,000. The relevant Paragraph 4.2 (xxii) of the Impugned Order is reproduced as follows: "4.2(xxii) I have carefully examined the above submission made by the advocate of the noticee in the given context of the case and also against the stipulation made under section 6(4) of FEMA, 1999....
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....1 with a capital of AED 3,00,000 out of which the share of the Appellant was AED 1,47,000 and the remaining investment was made by a local Arab Mr. Mohmmad Hassan A Aldarrai. The Appellant has taken the plea that AED 1,47,000 was from the earnings made by him during his stay in Dubai. In view of the Appellant having left Dubai merely 11 months back, the possibility of his having made such investment from his earning abroad cannot be ruled out. Such investment having not been made in cash has not been shown otherwise. As cited afore, the provisions of the law allows for investment by a person resident in India from his acquisition and earning abroad. We, therefore, do not agree with the finding in the Impugned Order that this charge has been established against the Appellant. 23. In view of the aforementioned discussions and analysis, we find that only four charges stand proved against the Appellant. These charges relate to the contraventions of FEMA as listed at preceding Paragraphs 2 (a), (b), (c) and (e) of this Order and for these four charges, the total penalty which has been imposed in the Impugned Order are Rs. 17,87,000/- Rs. 40,26,000/- Rs. 40,20,000/- and Rs. 80,89,000/....