TaxTMI 
TaxTMI 
2026 (9) TMI 740
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....lication of mind. The PAO was issued on the contrived plea of bribe money when in fact what it attached was long term capital gain. Moreover, the so call bribe money was in the form of cheques. It was not inquired as to who collected the two cheques of the Complainant. Ld. Counsel contended that apart from the vague complaint from the Complainant and another baseless statement of one more student there was no allegation whatsoever by any student of the University that any donation amount was paid to the Appellant. On the contrary as many as 115 students of the University examined by the Anti-Corruption Bureau (ACB) had stated giving cheque to the Sumandeep Vidyapeeth deemed to be University as security amount. There was no reason given by the Ld. AA as to dismiss the submissions made by the Appellant before it. It has also been ignored that the Appellant was the President of Sumandeep Vidyapeeth Trust and had nothing to do with it otherwise. The Appellant had no influence or control over the University. All the students and parents had given undertaking and affidavit at the time of admission which though recovered during the raid by the ACB, were never brought on record. 3. Ld. ....
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.... by cash of Shri Mansukh Shah himself." Ld. Counsel further stated that that the Respondent Directorate regarded the Appellant as a public servant and had made baseless allegation that the long-term capital gains were stage managed. He further stated that the Appellant in his family remained invested in the said shares for long time. This was also not disputed by the Respondent. Ld. Counsel stated that the alleged amount of Rs. 20,00,000/- as bribe money had no correlation with charge of money laundering made against the Appellant. Ld. Counsel further submitted that the Respondent simply relied on the statements of Mrs. Jasminaben Devda, and chose to make the edifice of the allegation on the self-serving statement of Mrs. Jasminaben Devda as pretence for attaching the legitimate gains from the sale of shares of the entire family of Dr. Mansukhbhai Shah. Mrs. Jasminaben Devda had made vague and omnibus allegations that all the students admitted to Sumandeep Vidyapeeth had paid donations ranging from Rs. 15,00,000/- to Rs. 35,00,000/- in cash for MBBS course. However, the said allegations have remained unsubstantiated and the Respondent Directorate could not find any student or pa....
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....ught to link it with the alleged predicate offence. Ld. Counsel in this regard pointed out the Table given at page 29-30 of the Impugned Order wherein the buy date and the buy value along with sale date and sale value of the shares of M/s Citizen Yarns Ltd. and M/s Dhyana Finstock Ltd. have been summarized, so as to erroneously conclude that the Appellant and the family adopted the said modus operandi to declare long term capital appreciation of Rs. 2,64,11,351/- and Rs. 7,44,36,525/- in the shares of M/s Citizen Yarns Ltd. and M/s Dhyana Finstock Ltd. respectively. Ld. Counsel stated that there is no case of money laundering which has been established against the Appellant and therefore pleaded to allow the Appeal. 5. Ld. Counsel for the Respondent Directorate submitted that the statements recorded under Section 50 of PMLA clearly bring out the offence of money laundering indulged in by the Appellant. The Appellant indulged in the said offence, so as to launder the proceeds of crime (PoC) through his activity of indulging in share market. The PoC had been generated by the Appellant as a result of criminal activity by collecting bribe money from the students and their parents wh....
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.... 6. Ld. Counsel for the Respondent submitted that the statement of Shri Hari Prasad Khetan, the Managing Director of M/s Citizen Yarns Ltd. was recorded under Section 50 of PMLA. Shri Khetan stated that their factory had a fire accident and as the insurance claim was not passed, they could not sustain the business. Accordingly, M/s. Citizen Yarns Ltd. was not carrying out any manufacturing activities since December, 1997. He stated that since the Company was a listed Company, he could not de-list it and he was required to furnish periodical returns to the various authorities. He also stated that he learnt about the sudden rise in the prices of shares of his Company in June, 2015 and thereafter he had informed the same to Bombay Stock Exchange. He stated that the price of the shares of his Company was going up without any change in the nature of business of the Company. Ld. Counsel stated that during the course of investigation M/s Bombay Stock Exchange (BSE) provided the 'Trade Logs' with respect to five Companies viz M/s Citizen Yarns Ltd., M/s Transglobe Foods Ltd., M/s Dhyana Finstock Ltd., M/s Parikh Herbal Ltd. and M/s Emed. Com Technologies Ltd. which clearly indicated that ....
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....tion has confirmed that more than one transaction was undertaken to indulge in money laundering. Ld. Counsel clarified that even though the Appellant had been discharged by the Hon'ble High Court of Gujrat in the matter relating to the Scheduled Offence, the same was appealed against in the Hon'ble Supreme Court by the ACB Ahmedabad. The Order of the Hon'ble High Court of Gujrat was reversed by the Hon'ble Supreme Court and the Trial Court has since been seized of the matter against the Appellant. Moreover, a Prosecution Complaint under PMLA is under consideration of the Special Court under PMLA at Ahmedabad. He therefore pleaded to dismiss the Appeal. 7. We have considered the rival submissions and the material on record. The fact that the Appellant had invested in the shares of five Companies viz M/s Citizen Yarns Ltd., M/s Transglobe Foods Ltd., M/s Dhyana Finstock Ltd., M/s Parikh Herbal Ltd. and M/s Emed. Com Technologies Ltd. which were sold off with capital appreciation has not been disputed by either of the two sides. While the Appellant has contended that such transactions were in the nature of investment that culminated in long term capital gains, the Respondent has al....
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....y members for total Rs. 15,89,638/-. Once the amount reached the trading account of Shri Mansukh Shah and his family members, the same was projected as untainted money. Similarly, the bank account no. 113150050800418 in Tamilnad Merchantile Bank of Shri Chandubhai Vaghela was scrutinised. The scrutiny reveals that the said account of Shri Chandubhai Vaghela had received Rs. 2,80,000/- Rs. 5,00,000/- Rs. 10,00,000/- and Rs. 1,10,000/- on 01.06.2015, 11.06.2015, 11.06.2015 and 18.12.2015 respectively from M/s Shaswat Enterprise, M/s. Sapan Traders, and M/s. Maruti Corporation. Subsequently Rs. 2,80,000/- Rs. 5,00,000/- Rs. 10,00,000/- and Rs. 2,24,532/- were sent from this account to the share broker M/s. Shah Investors Home Ltd. on 02.06.2015, 12.06.2015, 13.06.2015 and 21.12.2015. Subsequently these amounts were used for purchase of shares of M/s. Citizen Yarns Ltd. on 08.06.2015, 11.06.2015, 12.06.2015, 23.12.2015 and 04.01.2016 from Shri Mansukh Shah and his family members for total Rs. 21,54,901/-. Once the amount reached the trading account of Shri Mansukh Shah and his family members, the same was projected as untainted money. These details clearly bring-out the manner in which....