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TMI Blog2023 (7) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... n assets and income which legitimately belongs to the nation. In the Budget Speech of 2015, the Central Government disclosed its intention to bring enactment to address the black money parked outside the nation. 2. The Apex Court of India has also expressed concern over the problem of black money. The Special Investigation Team constituted by the Central Government to implement the judgment of the Supreme Court expressed its view and suggested the measures to be taken to curb the menace of black money. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (in short "the Act of 2015") was brought to address serious problem of black money affecting the economy of the country erased by unused at the cost of the development of the Country. 3. The present Appeal is an outcome of an action taken by the Appellant Department in pursuance to the Act of 2015 and the Prevention of Money-Laundering Act, 2002 (in short "the Act of 2002"). The Appeal has been preferred by the Department to challenge the order of the Adjudicating Authority refusing to confirm the Provisional Attachment Order. The Appellant Department has raised important legal issues for addres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss-I Inc, incorporated under the laws of Republic of Panama with an authorized capital of 500 common shares. In the statement recorded u/s 132 (4) of I.T. Act, of Respondent No. 11, it was admitted that the property Flat No. 6, Grosvenor Hill Court, Bourdon Street, London was bought in 2013 for a consideration of Rs. 10 Crore. All the 500 shares of Panama based entity were purchased by investing Rs. 10 Crore in 2013 to acquire the flat through two bearer certificates which Respondent No. 11 had kept with his attorney in London namely Patricia Bouchara and Associate, 117 A, Mounster Lane, London. Admittedly the source of acquisition of the property and other expenses were out of the funds generated by Respondent No. 11 through Dubai based entity. (iii) Property No. 12, Ellerton House, Bryanston Square, London - Page No. 54-56 of Annexure A-6 and pages 139-141 of Annexure A-3 found and seized during the search action at his office premises 12 A, Panchsheel Enclave, new Delhi were copies of emails sent to his email ID at [email protected] and enclosed the sales memo for 12, Ellerton House, Bryanston Square, London. It revealed his offer to purchase the property in 2009. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Panama called Shamlan Gross. Respondent No. 11 also admitted that two bearer share certificates of this foreign entity were kept in London with his attorney Patricia Bouchar and Associates. (viii) Petro Global Technologies FZC - The seized copies of the emails extracts revealed his interest in an entity called Petro Global Technologies FZC, incorporated in UAE. The information gathered revealed that he was one of the owners of this entity having 33.3% shareholding. (ix) MVD Global - Pages 17-23 of annexure A-5 found and seized as part of copies of email extracts, included a mail from Barclays dated 9-6-2011, to him regarding outstanding fee for MVD Global Ltd evidencing his interest in this entity. (x) As per the documents recovered and seized by Income Tax authority on 27-04-2016 and Statement of Respondent No. 11, recorded on 29-30/04/2016 by Income-tax authority, it has revealed that Respondent No. 11 was either account holder or authorized signatory of the following foreign bank accounts: A. Bank Accounts in the name of Santech International FZC held with Emirates Bank International, A1 Qusais Branch, Dubai: a. Account No. 1021497657901 (USD) (There is a total cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 132(4) and 131 of the Income-tax Act, 1961 (in short the "Act of 1961"). The Respondent Sanjay Bhandari admitted interests in the entities incorporated outside India i.e. Santech International FZE, Dubai, Offset India Solutions, UAE, Shamlan Gross-1 Inc, Panama , Serra Dues Technologies FZC, RAK, UAE, MVD Global, Petro Global Technologies FZE, UAE. The income accrued from those entities were not reflected in the Income-tax Return and it was further admitted that he owned three properties in Dubai and London and had not disclosed in the Income-tax Returns. 9. The Income Tax Department, New Delhi vide its letter dated 05-4-2017 sent copies of Panchnama prepared on search at various premises of Sanjay Bhandari, Ashok Shankar and Shri Sanjeev Kapoor. The Panchnama dated 29-4-2016 and 28-6-2016 was prepared even on a search at residential premises of Shri Ashok Shankar at New Delhi where foreign currency to the tune of Rs. 9,95,330/- (Rupees Nine Lakh Ninety five Thousand Three Hundred Thirty Only) and jewellery worth of Rs. 2,37,07,445/- (Rupees Two Crore Thirty seven Lakh Seven Thousand Four Hundred Forty five Only) were recovered and seized from the bags belonging to Sanjay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er interpretation of the provisions of law applicable on the subject and at the same time ignored relevant provisions, thus impugned order has been challenged by the Appellant. 16. It was submitted that the Enforcement Directorate received information from the Income-tax Department alongwith the material to show various foreign assets and income in the hands of Shri Sanjay Bhandari and his associates. The foreign assets were consist of bank account, movable and immovable properties not disclosed in the Income-tax Return. The facts aforesaid were admitted by Shri Sanjay Bhandari in his statement recorded by Income-tax Authority. The search and seizure was conducted not only at different places belongings to Shri Sanjay Bhandari but person connected with him which includes Shri Sanjeev Kapoor. 17. The material seized during the search and the statements recorded from time to time were sent to the Appellant Department. It was alongwith the copy of notice issued to the Respondent under section 10(1) of Black Money Act, 2015 and imposition of Tax Act, 2015 on 22-9-2016. The said notice has been quoted by the Adjudicating Authority without quoting the material enclosed alongwith it. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority but before that we would refer relevant provisions with interpretation. (1) The Offence under section 51of Black money Act, 2015 20. The Scheduled offence involved in this case is under section 51 of Black money Act of 2015 thus it would be relevant to quote the said provision:- "Section 51 Punishment for willful attempt to evade tax - (1) If a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, willfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine. (2) If a person willfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and shall, in the discretion of the court, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utside India, which has not been disclosed in the return of income furnished within the time specified in Explanation 2 to sub-section (1) or under sub-section (4) or sub-section (5) of section 139 of the Income-tax Act; (b) the income, from a source located outside India, in respect of which a return is required to be furnished under section 139 of the Income-tax Act but no return of income has been furnished within the time specified in Explanation 2 to sub-section (1) or under sub-section (4) or sub-section (5) of section 139 of the said Act; and (c) the value of an undisclosed asset located outside India. (2) Notwithstanding anything contained in sub-section (1), any variation made in the income from a source outside India in the assessment or reassessment of the total income of any previous year, of the assessee under the Income-tax Act in accordance with the provisions of section 29 to section 43C or section 57 to section 59 or section 92C of the said Act shall not be included in the total undisclosed foreign income. (3) The income included in the total undisclosed foreign income and asset under this Act shall not form part of the total income under the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Schedule quoted above makes a reference to "offence of cross border implication". According to the Respondent, to fall under Part C, an offence should be of "cross border implication" which is not the case in hand. To make out a case of "cross border implication" there has to be transfer of property out of India. According to the Respondent, there is no transfer of proceeds of crime outside India to fall in the definition of "offence of cross border implication". According to them Appellant could not produce material to prove the aforesaid. The foreign assets alongwith entities in Dubai were existing prior to coming into force the Black Money Act of 2015 without its transfer thus a case of "cross border implication" would not be made out. We find that even the Adjudicating Authority has recorded its finding in reference to the definition of "offence of cross border implication" given under section 2(1)(ra) and for ready reference it is quoted hereunder:- "Section 2(1)(ra) "offence of cross border implications", means- (i) any conduct by a person at a place outside India which constitutes an offence at that place and which would have constituted and offence specified in Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax chargeable under the said Act is evaded. The evasion of tax cannot have an element of transfer as it is a liability of tax not disclosed and paid. The evasion of tax is an amount not paid by the assessee thus question of its transfer cannot arise. The interpretation given by the Respondent and accepted by the Adjudicating Authority would make item No. 4 of 'C' of Schedule redundant and in no case, an offence under section 51 of the Black Money Act of 2015 would be made out. It is the reason that evaded tax cannot have an element of transfer out of India. It is obligatory on the Courts to take proper interpretation of the provision which does not make it to be redundant. Thus, item No. 4 of part 'C' of Schedule brought by way of amendment in the year 2015 is to be read separately from of the rest of the provision. It is also for the reason there is a full stop after item No. 3 of Part 'C' of Schedule whereas between item No. 1 and 3 there exist "or" to give continuity to the provision upto item No. 3. The Scheduled offence given at item 4 of part 'C' would never be made out if the interpretation taken by the Adjudicating Authority is accepted. 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business for any other person after he ceased to be an insurance agent for the particular company. The said decision deals with the clauses under the Insurance Act. It is to be noted that section 44 of the Act was made applicable to LIC as per GSR 734 dated 23-8-1958 published in the Gazette of India dated 23-8-1958 and the same was amended as per GSR 262(E) dated 24-7-1972 published in the Gazette of India dated 24-7-1972 The pointed question involved in this case, as mentioned hereinbefore, is as to whether the second limb of clause (c) of the proviso to Section 44(1) of the Act is one which would apply to the other different clauses thereunder viz., clauses (a), (b), (bb) and (bbb) introduced to that proviso for application to LIC so as to import the said embargo even in respect of persons falling under clauses (a) to (bbb). Therefore, we are of the considered view that the issue requires a deeper probe to answer the question under consideration. A careful scanning of clauses (a) to (bbb) and clause (c), of Section 44(1) of the Act, as extracted above, would leave no room for any doubt regarding the position that they carry different eligibility criteria for renewal commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be said that it is purely a part of clause (c) alone having applicability in the cases of persons falling under the first limb prohibiting payment to them if they directly or indirectly solicited or procured insurance business for any other person. The purpose revealed from the second limb of clause (c) of the proviso to Section 44(1) of the Act applicable to LIC, cannot brook any construction other than that the said condition is intended to act as an embargo applicable to all the clauses carrying eligibility criteria for renewal commission on cessation of agency and that it is one which would disqualify the contravenors who directly or indirectly solicit or procure insurance business for any other person, from receiving renewal commission. If clause (c) as such is taken as independent clause and the embargo lies in the second limb as one applicable only to those former LIC agents falling under its first limb it would be an arbitrary, hostile discrimination against those former agents who toiled and moiled for LIC much more years than those who fall under the other clauses viz., (a) to (bbb). At the same time, if it is taken as an embargo applicable to all former LIC ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bb)." 32. In view of the aforesaid, the Scheduled offence under item No. 4 of part (c) is not to be governed the definition of "cross border implication" and accordingly we hold that the interpretation of the provision taken by the Adjudicating Authority is after mis-reading of the provision, thus cannot be endorsed or accepted. 33. The issue is required to be considered even in reference to Section 2(1) of the Act of 2002 which defines the words and phraseology under the Act of 2002. It is quoted hereunder for ready reference:- "Section 2 of The Prevention of Money-Laundering Act, 2002" 2 Definitions. - (1) In this Act, unless the context otherwise requires - 34. As per the provision aforesaid, the definition is to be applied as has been given under the definition clause unless context requires otherwise. The provision of Section 2(1) thus makes it clear that definition is to be applied in the context it is to be used. In the case in hand, the definition of "offence of cross border implication" under section 2(1)(ra) is to be read in the context. The item no. 4 of Part 'C' Schedule makes a reference to the offence under section 51 of the Black Money Act, 2015. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; (b) such proceeds of crime are likely to be has been charged of having committed a scheduled offence; and (c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrating the proceeds for confiscation. The second proviso to Section 5(1) pre-supposes possession of the proceeds of crime and which is likely to be concealed, transferred or dealt with in a manner which may frustrate the confiscation. 40. The first proviso, however, mandates that an order of attachment can be made when a report has been forwarded to the Magistrate under section 173 Cr. P.C. for a Scheduled Offence or a complaint has been filed by an officer competent to investigate the offence for taking cognizance by a Court of Magistrate. As per the first proviso, the attachment of the property cannot be made unless the compliant for the Scheduled Offence is recorded for investigation or sent to the Magistrate. The second proviso is an exception to first proviso. It does not require any of the formalities indicated in the first proviso. If the Director records reason of belief based on the material that the property involved in the money laundering needs to be attached immediately as non-attachment would frustrate the proceedings. The Provisional Attachment Order in the case in hand was issued under second proviso of section 5(1) of the Act of 2002 yet the Respondent made muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-2017, the written replies filed by the defendants in the matter had as one of its annexure produced, letter dated 11.10.2017 received by/on behalf of the Defendant No. 11. As aforesaid the said replies were filed by the Counsel for the Defendants on or about 16-10-2017. As the said letter dated 11-10-2017 received by the defendant no. 11 from the Principle Commissioner of Income Tax, Central-3, New Delhi is very relevant, the same is reproduced hereunder. Dated 11-10-2017 "F. No. Pr. CIT/C-3/Prosecution(B.M.Act)/2017-18/1838 To Sh. Sanjay Bhandari B-2017, Greater Kailash-1 New Delhi (PAN-AACPB3772G) Sir, Sub: Proposal for launching prosecution proceedings under section 50 of the Black money (undisclosed foreign income and assets) and Imposition of Tax, Act,2017 (In short Black money Act) in the case of Sh. Sanjay Bhandari (PAN-AACPB3772G) for A.Y 2017-18-reg. Kindly refer to the above cited subject 2. A search and seizure operation was carried out in your case, at your premises on 27-4-2016. During the search and seizure operation, incriminating documentary, evidences, information found, establishes that you find had undisclosed following bank account and pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 1251570 NIL 11 2014-15 30.03.16 Invalid 1340890 NIL 12 2015-16 30.03.16 Return uploaded 1207860 NIL 13 2016-17 20.07.16 Return uploaded 184420 NIL 4. Subsequently, search operation was conducted on 7-2-2017 u/s 132 of the Income-tax Act, 1961 against Sh. Sanjeev kapur (DoS 07/02/2017) and Sh. Anirudh Wadhwa and Sh. Abhinandan Banerjee (DoS 07/02/2017) u/s 132 of the Income-tax Act, 1961. 5. During these searches, incriminating evidences and documents were unearthed and it was establish in statement recorded on oath, that were preparing to alienate you foreign assets and off-shore entities by fabricating and back dating documents in order to evade income Tax under the Black Money (Undisclosed Income & Foreign Assets) Act,2015. 6. In view of the above documents, you are hereby communicated, that:- * During the course of search and seizure action u/s 132 of IT. Act, 1961 initiated on 27-4-2016 in you case and connected cases, several documents were found and seized. * The Above information so collected establishes that your owned foreign assets in the form of foreign bank account, foreign immovable properties and interests in various foreign entities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unquote * However, the evidence gathered and admission of Sh. Sanjeev Kapoor, revealed that the scheme was to appoint you as the sole trustee of a trust (Alrahama Trust) based in UAE, with effect from 2006. Further, it would be shown that all the foreign assets/offshore entities held by you, was not in you individual capacity, but in the fiduciary capacity, as the trustee of the trust. Further, attempt was to transfer the sole trusteeship from you to Sumit Chadha (your close associate and U.K. national) retrospectively from March 2015, which would be before the Black Money (Undisclosed foreign Income and assets) and imposition of Tax Act, 2015 came into effect. Thus, the scheme would have enabled you, to alienate you foreign assets by brining all the offshore entities and foreign assets under the umbrella of the trust, had it been successful. All this was proposed to be achieved through fabrication and back dating of documents. * During the course of search u/s 182 of the Act on the person of Sh. Sanjeev Kapoor at the IGI Airport, New Delhi, several incriminating evidence was found to establish fabrication of documents in relation to proposed trust. Copy of the trust deed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure would be set up wherein you would be appointed as the sole trustee. Thereafter, the alrahama trust was acquired in Dubai, UAE and you were appointed as the sole trustee. The trust was made effective from February 2006. Subsequently, it was decided that you would resign as the sole trustee effective from March 2015 and Sh. Sumit Chadha would be appointed retrospectively in his place on the same date. * Sh. Sanjeev Kapoor has further stated that the necessary documentation with respect to the same was prepared under the guidance of Sh. Anirudh Wadhwa an sent through the pen drive (marked as Annexure A-5) to him by Wadhwa lay Associates. Sh. Sanjeev Kapoor has further stated on oath that the said soft copy of the draft correspondence/letter were taken by him to London and dubai, and the signatures of relevant persons such as you, Sh. Sumit chada and settle of the Alrahma trust on the said correspondence/letters dated 23-2-2015 to 15-3-2015 were actually made during his visit to London and Dubai, i.e. 31-1-2017 and 5-2-2017. * Sh. Sanjeev Kapoor was also questioned regarding the trigger for wanting to change the structure of the trust. In response to the said question, Sh. Sanj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Associates (which hold Apartment no. 143, Hepworth Court, UK which as bought in year 2014) * Further Search u/s 131 (1A) of the Act was conducted in the case of Sh. Anirudh Wadhwa and Sh. Ahinandan Banerjee and survey u/w 133A of the Act was conducted in the office of Wadhwa Law Chambers. During the course of search and survey action, various incriminating evidence was found which corroborated with the statement of Sh. Sanjeev Kapoor and evidence found from his possession. * 10. Sh. Ahinandan Banerjee, admitted in his statement recorded on oath, that the draft documents with respect to the trust, were prepared by him and that he was working on you case on the express instructions of his "Superiors" In the light of the findings it is established that the creation of the trust and change in its structure were a premeditated scheme to disassociate you from all you offshore entities/foreign assets by back dating the documents. It is pertinent to mention that you have failed to comply with the numerous summons issued to him u/w 131 (1A) of the income Tax Act, 1961, from time to time. A show cause for penalty u/s 272A(1)(c) r.w.a 274 of the Income-tax (Inv.) Unit-6, Delhi for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, after receiving the same and after seeking adjournments you have finally submitted a vague reply on 3-11-2016 without any documents/proofs in support of you claim, mainly claiming that you were holding the above properties in fiduciary capacity and you are in no way the beneficial owner of these foreign properties and that you have resigned from all such fiduciary positions in relation to all such foreign assets prior to April,2015 which is prior to the enforcement of this act and any such transition under taken by you in the past, especially in capacity as a trustee, are not covered by the terms of this Act. Later you sought time for submitting these documents but never submitted the same even after 3 months. Finally summon u/s 131 of the Income-tax Act 1961 was issued to you on 7-2-2017, to explain you residential status and submit replies w.r.t. questionnaire issued earlier to you. Nobody appeared and the AR also submitted the Application for withdrawal of his power of attorney after attaching the proof of serving notice to you in this regard. You have filed returns of income tax for various assessment years on dated mentioned against the column in the table. Declaring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Provisional Attachment Order shows it to be under second proviso to Section 5(1) of the Act and otherwise it is not necessary to invoke first proviso to Section 5(1) of the Act of 2002. 44. A reference of facts referred above would also be given while dealing with the factual issues after completion of the finding on the legal issue. We may refer to the definition of "proceeds of crime" given under section 2(1)(u) and is quoted hereunder:- Section 2(1) (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]; 45. Section 3 of the Act of 2002 is also quoted which defines money laundering:- "Section 3. Offence of money-laundering.- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han the rank of Deputy Director. We must hasten to add that the nuanced distinction must be kept in mind that to initiate "prosecution" for offence under Section 3 of the Act registration of scheduled offence is a prerequisite, but for initiating action of "provisional attachment" under Section 5 there need not be a pre-registered criminal case in connection with scheduled offence. This is because the machinery provisions cannot be construed in a manner which would eventually frustrate the proceedings under the 2002 Act. Such dispensation alone can secure the proceeds of crime including prevent and regulate the commission of offence of money-laundering. The authorised officer would, thus, be expected to and, also in a given case, justified in acting with utmost speed to ensure that the proceeds of crime/property is available for being proceeded with appropriately under the 2002 Act so as not to frustrate any proceedings envisaged by the 2002 Act. In case the scheduled offence is not already registered by the jurisdictional police or complaint filed before the Magistrate, it is open to the authorised officer to still proceed under Section 5 of the 2002 Act whilst contemporaneously s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets in the form of foreign bank account and foreign immovable properties owned by the Respondents. It was also revealed that Sanjay Bhandari has incorporated entities in Dubai to which he was a Director/beneficial shareholder having financial interest. The foreign assets and entities controlled by Sanjay Bhandari were not disclosed in the Income-tax return for the purpose of taxation. The details of the properties have been given and pursuant to which, the Income-tax Authority issued various notices however the Respondent and the Adjudicating Authority has made much emphasis on the notices dated 14-9-2016 issued under section 127 of Income-tax Act. It is after ignoring the notice dated 22-9-2016 where details of the foreign assets alongwith all relevant material disclosed to the Appellant Department. It was to show evasion of tax under the Black Money Act of 2015 as in the Return from the year 2016 and onwards, those foreign assets and income were not disclosed thus not subjected to tax. The complete notice dated 22-9-2016 is quoted hereunder:- "Office of the Joint Commissioner of Income Tax Central Range-7, Room No. 329 E-2, Jhandelwalan Extension, New Delhi-110055 Teleph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was admitted by you that both the initial investments and subsequent expenditure relating to this property were not disclosed by you to the income tax department. In this connection, it is requested to furnish the following details: (a) Copy of agreement for purchase of property/copy of the title of the property. (b) Details of total investment in purchase of this property and also in subsequent renovation etc. along with source and manner of payment thereof, with supporting evidence. (c) Details of payment made to broker/consultant for acquisition of this property along with source and manner of payment thereof, with supporting evidence. (d) Details of expenses incurred in upkeep of this property with source of expenses and manner of payment, with supporting evidence. (e) Fair market value of this property as on 1st April, 2016 with supporting evidence. (ii) Flat No. 6 Grosvenor Hill Court Bourdon Street, London: During the course of search & seizure action at the residence of Sh. Ashok Shankar, A-341, Defence Colony, New Delhi, page no. 57 to 66 of Annexure B-3 were found and seized. In your statement recorded u/s 132 (4) of the I.T. Act, 1961. It was admitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our offer to purchase the property in 2009. This property was sold by you in June, 2010 which is revealed through emails from the consultant at Barclays dated 9th June, 2010, asking you for signatures on letter attached, where he is instructing the nominee shareholders to instruct Vertex Management holding to sell the Bryanston Square property. The same was found and seized as page 48 of Annexure A-5. There is another email dated 25-6-2010 from a consultant at Barclays, sent to your email i.d. enclosing an invoice from HB] (the legal consultants for the deal involving the Bryanston Square property) dated 22-6-2010 with respect to the sale of Bryanston Square property in you statement recorded u/s 134(4) of the Act on 29/30-4-2016, it was admitted that these papers pertain to property transactions for the property 12, Ellerton House, Bryanston Square, London WIH 2DQ, which was held by Vertex Management. Holding Limited. The holding company was purchased by you in lieu of consideration of 19 lakhs Pounds and the payment was made from Santech International Dubai. It was further admitted that the above transaction was not accounted for in your Income-tax Returns. In this connection, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. Details of financial interest of different shareholders in the entity. (g) Details and addresses of all immovable and other assets owned by the entity. (h) Fair market value of your share in the entity as on 1st April, 2016 with supporting evidence. (v) Santech International FZC: Your email extracts were recovered from your email i.d. delta.bhandari@hotmail. com found and seized from the Hard Disk, annexurized as A-16, during the course of search & found and seized action u/s 132 of the I.T. Act at your office Premise, 12-A Panchsheel Enclave, New Delhi. In the email extracts, am company license certificate dated 3-12-2015 or Santech International FZC was found, which list you as one of the owners of the entity, incorporated on 21st February, 2006. In your statement recorded u/s 132(4) of the Act on 29-30-4-2016, it was admitted that incorporated this entity. It has been further admitted that the income accrued from this entity was not reflected in your Income-tax Returns. It has been gathered that you are one of the directors of the entity as well as majority shareholders. In this connection, it is requested to furnish the following details along with evidence: (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years since the inception of the entity. (c) Details with source and manner of your investment in the above said entity with supporting evidence. (d) Details of income generated/accrued to you from this entity since inception till date with manner of accounting/utilization of the said income with year wise break up and supporting evidence in this regard. (e) Copies of all bank statements of the entity since its inception along with narration of entries. (f) Your percentage of ownership in the entity along with complete names and addressed of all other Indian residents who are beneficial owners of the entity. Details of financial interest of different shareholders in the entity. (g) Details and addresses of all Immovable and other assets owned by the entity. (h) Fair market value of your share in the entity as on 1st April, 2016 with supporting evidence. (vii) Shamlan Gros During the course of search action at the residence of Sh. Ashok Shankar, your close associate, certain documents belonging to you were found and seized. It was found that you were the beneficial owner of an entity incorporated in Panama called Shamlan - Gros. A draft bearer share custody agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in the above said entity with supporting evidence. (d) Details of income generated/accrued to you from this entity since inception till date with manner of accounting/utilization of the said Income with year wise break up and supporting evidence in this regard. (e) Copies of all bank statements of the entity since its inception along with narration of entries. (f) Your percentage of ownership in the entity along with complete names and addressed of all other Indian residents who are beneficial owners of the entity. Details of financial interest of different shareholders in the entity. (g) Details and addresses of all Immovable and other assets owned by the entity. (h) Fair market value of your share in the entity as on 1st April, 2016 with supporting evidence. (x) MVD Global: Pages 17-23 of Annexure A-5, found and seized as part of the copies of the email extracts, include a mail from Barclays dated 9-6-2011 to you regarding fee outstanding for MVD Global Limited. Another email dated 20-7-2012, discuss outstanding annual fee for MVD Global Limited. Please clarify your interest in this entity. In this connection, it is requested to furnish the following details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd narration of entries. Also furnish copy of account opening form with details of authorized signatories. (xi) Account number 1-2001207-01, in the name of Serra Dues Technologies Limited, held with Standard Chartered Bank. PO 999. A1. Mankhool Road. Dubai: In your statement recorded on oath u/s 132(4) of the I.T. Act on 29-30-4-2016, it was admitted to have a bank account in the name of Serra Dues Technologies Limited with Standard Chartered Bank, Dubai. Further, seized copy of email dated 15-9-2009 sent to [email protected] from Sh. Rajesh Ambikan reveal the bank account number of Serra Dues Technologies Limited. The information gathered reveal that you are the authorized signatory of this bank account. In this connection, it is requested to furnish copies of all bank statements of Serra Dues Technologies Limited since its incorporation along with source of credits till date and narration of entries. Also furnish copy of account opening form with details of authorized signatories. (xii) Account number 1011507575301 in the name of the Offset India Solutions. held with Emirates Bank International. Dubai: In your statement recorded on oath u/s 132(4) of the I.T. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the requisite information. Yours faithfully, (Sanjeev Minocha) Joint Commissioner of Income-tax Central Range-7, New Delhi" 53. The details of the assets, the statement of Sanjay Bhandari and his associates, which include Shri Sanjeev Kapoor, Chartered Accountant has been detailed out in this judgment. Those paras provide details as to when the statement of Sanjay Bhandari, Ashok Shankar and Sanjeev Kapoor were recorded and details of those statement. 54. The statement of Shri Sanjeev Kapoor were recorded under section 50 of PMLA while Sanjay Bhandari and Sonia Bhandari did not appear before for the statement under section 50 of the Act of 2002 despite several notice. One Ajay Kumar Agarwal in his statement on 14-6-2016 and 15-6-2017 admitted about the receipt of Rs. 22 Crore from Sanjay Bhandari for arranging accommodation entries. The record further shows that after initiation of the action by the Income-tax Department and service of notice to the Respondent Sanjay Bhandari, he had attempted to transfer foreign assets to a trust in Dubai. All those facts were sufficient to show an offence under section 51 of the Black Money Act of 2015. 55. The Adjudicating Authority re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 51 Punishment for willful attempt to evade tax - (1) If a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, willfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine. (2) If a person willfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and shall, in the discretion of the court, also be liable to fine. (3) For the purposes of this section, a willful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person - (i) has in his possession or control any books of account or other documents (being boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect of Black Money Act of 2015 rather it was much prior to it. The argument is in ignorance to the provisions 3 & 4 of the Black Money Act of 2015. Section 3 & 4 required that all the foreign assets and income should be disclosed in the assessment year commencing on or after 1-4-2016 to charge tax @ 30%. 61. In view of the above, the Black Money Act of 2015 was made applicable even for the undisclosed foreign income and assets prior to the coming into effect of the Black Money Act of 2015. The Adjudicating Authority has thus committed grave error in questioning the applicability of the Black money Act of 2015 in reference to the foreign income and assets prior to coming into force the Black Money Act of 2015. 62. At this stage, we may refer to the ECIR and the Provisional Attachment Order which has also been quoted by the Respondent and even by the Adjudicating Authority. In the written argument submitted by the Respondent, reference of para 3 & 7 (a) of the ECIR has been given to indicate reference of the order dated 14-9-2016 alone while in para 3 of the ECIR, the reference of order dated 22-9-2016 has also been given with the complete material referred thereafter to make out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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