TaxTMI 
TaxTMI 
2024 (8) TMI 1693
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....llant was found for creation of an FD of 3 crores earned out of demonetized money by the Govt. of India. 2. A case of money laundering was recorded after registration of the FIR against the accused involved in the case. It was found that a sum of Rs. 38 crores were obtained for converting demonetized currency into untainted monetized currency. The criminal activity was noticed and accordingly the case was registered. The appellant was one of the beneficiaries and was involved in assisting the other parties in the crime. As a result, he received the proceeds and was transferred to create a FD (Fixed Deposit)which has been attached by the respondents. 3. The facts on record shows that one Ashish Kumar also adopted the same modus operandi and received a sum of Rs. 3.65 crores for converting demonetized currency by way of getting the draft in the name of different persons. The appellant was also involved in a similar manner where he took demonetized money through bank transactions and subsequently created FD which has been attached by the respondents. 4. The counsel for the appellant submitted that the FD was out of valid transaction. The amount was received from the sale of t....
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....le of the tobacco was also proved. It may be that there was some mis- declaration or wrongdoing by the firms which purchased the tobacco while filing the tax return but that does not mean that the appellant had not sold the tobacco and received the amount. The non-consideration of the documents on record makes the impugned order illegal. Therefore, on this ground alone, the impugned order should be set aside with the provisional attachment order. 8. It is further submitted by the counsel for the appellant that he is not raising any other issue than raised above and when the facts on record prove it to be not a case of money laundering; the impugned order is in total ignorance of the material available on record. The Adjudicating Authority failed to appreciate the aforesaid while passing the impugned order, thus it deserves to be set aside. 9. The appeal has been contested by the respondents. Arguments have been raised to support the order passed by the Adjudicating Authority. The facts pertaining to the case have been given showing how the transaction was structured to circulate demonetized money and convert it through the banking channel. The persons involved there in have b....
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....erned by Yogesh Mittal and all the cash that was deposited in bank account of Nikhil Enterprises was actually collected, transported from the office of Yogesh Mittal and deposited in bank account on his clear directions and there were no actual business transactions, sales and purchase of goods took place. 13. In his statement before ED, Subhash Chandra Gupta, proprietor Archit Sales claimed that he dealt with these firms, M/s M.S. Enterprises, M/s Nikhil Enterprises, M/s P.S. Sales and M/s Yashoda Sales Corporation through one agent named Amitabh Bansal but he was unable to identify the actual proprietors of these firms. He claimed that he had delivered tobacco products which was found to be a purported story. 14. Amitabh Bansal in his statements inter alia, stated that he knows Subhash Chand Gupta, proprietor Archit Sales and used to procure sales order for Archit Sales. It was on commission basis on the orders executed through him. He also knew Yogesh Mittal as a businessman of tobacco products since September 2016. He obtainedthe order of firms namely, Yashoda Sales Corporation, MS Enterprises, Nikhil Enterprises and P S Sales for purchase of products from Archit Sales on....
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....otherwise there is no document on record to show previous transaction of sale of tobacco to the firms named by the appellant and referred in the ledger account. Though a statement for it was made by the counsel for the appellant. It is also a fact that appellant alone was not the recipient of the demonetised money channelized through the bank channel but there were many others. We would however not refer to the facts of those cases as the appeal has been filed only by the appellant. It is however a fact that the circulation of demonetised money was at the instance of Yogesh Mittal who put cash in the bank account and thereupon transferred to many persons which includes the appellant to make demonetized money to be untainted. 19. The statement of Subhash Chandra Gupta was recorded under section 50 of PMLA, 2002. It was stated that his firm Archit Sales had transaction with M/s P.S. Sales. Rs. 50 lakhs and Rs. 25 lakhs were received on 30-11-2016 and 01-12- 2016 respectively and from Yasodha Sales Corporation Rs. 50,00,000 and Rs. 25,00,000 was received on 30-11-2016 and 01-12-2016 respectively. From Nikhil Enterprises Rs. 75 lakhs was received on 7-12-2016 and from MS Enterprises....