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2019 (2) TMI 214 - AT - FEMAViolation of provisions of section 4 of the Foreign Exchange Management Act, 1999 and Regulation 3 of the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 - inheritance of foreign exchange - Held that:- There is no dispute that the appellant being a person resident in India has inherited this amount as per the voluntary settlement deed executed by the settlers being person resident outside India - As per settled law, the word inheritance has to be given a wider meaning here. The word inheritance here cannot be limited to mean the asset acquired by a Human being/ natural person upon the death of a natural person because as per section 2(v) of the Act a ‘person resident in India’ includes a legal person. Thus, the property passing upon death of a person being resident outside India to a person resident in India whether the person resident in India is a natural or a legal person. As per Section 9(e) of the Act also if the foreign exchange has been acquired by way of gift or inheritance then even in that situation the provision of section 4 shall not apply. The reserve bank has not prescribed any limit for holding the foreign exchange in case the foreign exchange has been acquired by gift or inheritance - even if for a moment assuming that the provision of section 6(4) and section 9(d), (e) of the Act are not applicable in the instant case even than the appellant should not be held guilty for contravening the provisions of section 4 of the Act The appellant should not be considered to have violated the provisions of section 4 of the Act and Regulation 3 of the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 in view of peculiar facts and circumstances of the present matter - appeal allowed - decided in favor of appellant.
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