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TMI Blog2024 (9) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice (SCN) No. T-4/26/T/95(SCN-XXX) dated 18.06.1999 was not issued to the Appellant. Yet, the said amount of US $ 6,25,000 of the Appellant has been confiscated vide the impugned order. Moreover, the said amount was deposited in the FCNR accounts of the Appellant in the Indian Bank, Chennai and had been transferred through the banking channels. He further stated that since there was no hawala the contravention of Section 8(1) which was invoked against Smt. N. Sasikala could not have led to the contravention being applicable for the money owned by the Appellant. He cited the decision of the Income Tax Appellate Tribunal (ITAT) dated 02.04.2009 which held that since the money was owned by the Appellant, a resident abroad, and the money having been brought through banking channel the amount was not taxable in India. The Tribunal observed that even though the transactions and events looked curious and suspicious, it made its conclusions in accordance with the provisions of the Income Tax Act. He also stated that the provision of Section 63 of FERA cannot be invoked as a standalone provision in the absence of contravention of any other provision of FERA against the impugned amount. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from his sole proprietorship business- S Ramasamy stores, and no evidence of any assets having been disposed were available." 5. He also contended that there has been no evidence about her business abroad whether in UAE or in Singapore. He alleged that most of the amounts which were deposited in various accounts in Indian Bank and State Bank of India in Chennai were received in foreign currency in cash. The accounts were opened in the name of Appellant but in fact were for the benefit of Smt. N. Sasikala. The overseas enquiry also revealed that Smt. Susila was not known to the business entities and persons whom she claimed to know in UAE. Therefore, the funds in the accounts in the Indian Bank and the State Bank of India, Chennai did not belong to her as she had no financial resources to remit such amounts. Since most of the amounts in NRNR rupee deposits had been siphoned off as loans and advances to the companies for the benefit of Smt. N. Sasikala, US $ 6,25,000 in four FCNR accounts in the name of Smt. Susila had to be blocked u/s 73(3) of FERA which was subsequently confiscated vide the impugned order. He prayed for the dismissal of the Appeal. 6. We have carefully con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... husband and wife is indicative of the fact that at the time of sending the respectiveletters they did not come to a conclusion as to who should claim the amount. Information gathered from Inland Revenue Authorities in Malaysia revealed that though Smt. R. Susila and Shri S. Ramasamy were assessed to Income Tax at Malaysia both of them did not mention any thing in their return the preceding five years prior to 1997 about any remittance having been made to India. It was also mentioned that Smt. R. Susila had not declare any Income from M/s Komal Traders, Singapore and M/s Gulf World Fashion/Electronics, Dubai. Later, in her statement submissions dated 23.07.2009, Smt. Susila also changed her stand stating that her investment was in Gulf World Fashions and not Gulf World Fashions/Electronics. Likewise Shri S. Ramasamy also did not show any evidence regarding sale of assets. This information would only prove that the remittances in question were not, made by either Smt. R. Susila or Shri S. Ramasamy. Both Smt. R. Susila and S. Ramasamy have been staying in Malaysia and the drafts in question have been purchased elsewhere. Three drafts totally valued US$550000.00 were found to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any reason why the statements dated 14.8.1996 and 21.8.1996 of Smt. S. Sujaritha and statement dated 3.7.1996 of Syed Quamaludeen cannot be admitted in evidence against the noticee in the present proceedings before me. It is well settled in law that statements given before an Enforcement Officer is not hit by Section 25 of the Evidence Act and are admissible in evidence. Inthis case, Smt. Sucharitha and Shri Syed Quamaludeen had given their statements in response to summons issued to them under Section 40 of FERA, 1973. Further I also find that their statements were based on material facts and as such its evidentiary value is not at all questionable. Moreover, in faithful compliance of order dated 24.06.2005, the Department made available the presence of Smt. Sucharitha and Sri Syed Quamaludeen for the purpose of cross-examination by the advocate of noticees before relying on their statement(s) in the present proceedings. By making available the witnesses, the Department has discharged its onus as directed by Hon'ble High Court in its order dated 24.06.2005. If they had not carried out the cross-examination of witnesses, it is their decision. In view of the above posit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board, Malaysia (item no 21 of the relied upon documents) indicated that Smt. Susila had no such financial soundness to send such substantial sum of foreign exchange remittances to India and thereafter provide loans to M/s Bharani Beach Resorts Pvt. Ltd. The answer given by Shri Sudeesh Kumar to question no. 12 is of vital bearing in this case. After conclusion of the examination- in-chief, Shri Navaneethakrishnan, Advocate had commenced cross- examination of Shri Sudeesh Kumar. The witness submitted that he was the investigation officer of the case who had collated the various evidence and examine the same, and that after the examination of the various documents he had submitted a report to the Special Director in the Hqrs in New Delhi mentioning about the violations of the FERA, 1973 noticed against the noticee along with copies of the relevant documents The witness categorically stated that the charges made out against the noticee in the impugned SCN was based on documentary and circumstantial evidence elucidated from the relied upon documents. The cross- examination was adjourned for the next date of hearing on 18 8.2009 However on the said date. ShriNavaneethakrishnan, Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mt R Susila. The routing of funds from abroad first to FCNR/NRNR Account of Smt. Susila and thereafter to M/s Bharani Beach Resorts and subsequently to other 10 companies owned/controlled by the noticee and finally utilizing the said funds for purchase of Kodanadu Tea Estate for her benefit. The entire maze of complex transactions was only to alienate her from the source of fund illegally obtained by her in the first place from abroad without RBI permission. .......... 110. As regards the amount of US$.625000.00 lying in 4 FCNR accounts in the name of Smt. R. Susila, confiscation clause u/s 63 of FERA, 1973 was involved. In reply to the Memorandum, Smt. N. Sasikala the noticee herein had disclaimed any connection with the said amount. Smt. R. Susila though claimed, ownership of the funds remitted to India by stating that she was partner in M/s Komal Traders, Singapore and G.W. Fashions, Dubai and that when G.W. Fashion wound up its operations in 1995, she was issued a draft for US$ 1991610.00 which was remitted to India, did not submit any documentary evidence namely no. and date of the demand draft, the account number and name and address of the ban and such other relevant d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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