TMI Blog2019 (9) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... lid Business Visa by the Embassy of India, Seoul which Business Visa was valid from 28.07.2008 to 27.07.2009 and thereafter from 17.08.2009 to 16.08.2010 and on subsequent dates. Both entered India on 08th August 2008 and continuously stated in India till 17.07.2009 when they left India and came back after obtaining a fresh Business Visa for the period 17.08.2009 to 16.08.2010. It is further confirmed in the impugned order. Copy of passport of the Appellants with the relevant Business Visa and stamp of the Immigration Department for arrival and departure on the respective dates have been filed alongwith written submissions as Document no. 1. They purchased the immovable property on 01.09.2009, they had fulfilled the requirement of Person Resident in India as defined under section 2(v) of the Foreign Exchange Management Act, 1999 by continuously residing in India from 08th August, 2008 till 31.03.2009 for more than 182 days during the preceding Financial Year i.e. 2008-2009. Before they purchased the immovable property, had written a letter to the Reserve Bank of India on 06.08.2009 requesting for permission to purchase the property and for constructing a building thereon. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed in respect of proceedings initiated pursuance to show-cause notice No. T- 04/02/BGZO/JD(JK)/2014-15 dated 13.03.2015. 2. The Show-cause notice bearing No. T-04/02/BGZO/JD(JK)/2014- 15 dated 13.03.2015 had been issued by the Respondent to the Appellants wherein it had been alleged that the Appellants have contravened the provisions of Regulation 3 of the Foreign Exchange Management (Establishment in India of branch or business or other place of business) Regulations, 2000 read with Section 6(6) of the Foreign Exchange Management Act, 1999, (hereinafter referred to as FEMA), Regulation 5 of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 read with Section 6(2) of the FEMA to the extent of ₹ 2,15,21,972/-, Regulation 3 of the Foreign Exchange Management (Investment in firm or proprietary concern in India) Regulations 2000 read with Section 47 of the FEMA to the extent of ₹ 2,15,21,972/- and Regulation 8 of the Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations 2000 (Notification No. FEMA 21/2000 RB dated 3rd May 2000) read with Section 6(3) of the FEMA to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding and Lodging, restaurants, grocery shops, consultancy services, tours and travels, trading in export and import of garments, automobile accessories, publishing magazines and journals of various interest and other incidental and legal business. The Appellants obtained license from Registrar of Firms, Shivaji Nagar, Bangalore to run a Paying Guest accommodation vide license No. HO/E/LC/146/2011-12 dated 11.08.2011 which was renewed on 19.05.2012 and 05.03.2013. (b) The complaint goes on to state that as per the evidence on record and submissions made on behalf of the Appellant No. 1 at the time of personal hearing, it was revealed that the noticees had purchased an immoveable property i.e., residential site bearing No. 41 and 56, property No.116/2, Khata No. 88 measuring 3237 sq. ft. at Chelekere, K.R. Puram Hobli, Bangalore for a consideration of ₹ 16,03,000/- vide a registered Sale Deed dated 01.09.2009. It was further alleged they had paid a sum of ₹ 30,59,710 to one Ruben Ravikumar, a contractor, for the purpose of constructing a building at the said site. It was alleged that the source of income for purchase of the site and the payments to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorized banking channels to the tune of Rs. ₹ 2,15,21,972/- during 2009-2014. (iii)The Appellant No. 2 and 3 had purchased immovable property admeasuring 3237 sq. ft. in Bangalore at a cost of ₹ 40 lakhs vide Sale deed dated 01.09.2009. (iv) The said amount of ₹ 40 lakhs was received in cash from various other foreign nationals and had been deposited in ICICI Bank M-417, 80 feet Road, Kalyan Nagar Bangalore 560 043 in Savings Bank Account No.02980150568 in the name of the Appellant No.2 (v) The amount held in deposits in the bank accounts matches with the donations received from foreign nationals. 7. The Complainant based on the aforesaid allegations had issued a show cause notice calling upon the Appellant as to why the following properties should not be confiscated a. Land measuring 3237 sq. ft. at site No. 41 and 56, Katha No. 88, S. No. 116/2 at Challakere Village, K. R. Puram Hobli, Bangalore East Taluk, Bangalore 560 084; b. Savings Bank account No. 029801506568 maintainted with ICICI Bank, M-417, 80 feet Road, Kalyan Nagar Bangalore in the name of Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Four lakhs only) Regulation 3 of the Foreign Exchange Management (Investment in firm of proprietor concern in India) Regulations, 2000 read with Section 47 of the FEMA 1999 to the extent of ₹ 2,15,21,972/- Mr. Shu Kwan Oak ₹ 4,00,000 (Rupees Four lakhs only) -do- Mrs. Mijeung Bang ₹ 4,00,000 (Rupees Four lakhs only) Regulation 8 of the Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations, 2000 read with Section 6(3) of the FEMA 1999 to the extent of ₹ 71,83,982/- The Joy of India ₹ 2,00,000 (Rupees Two lakhs only) -do- Mr. Shu Kwan Oak ₹ 2,00,000 (Rupees Two lakhs only) -do- Mrs. Mijeung Bang ₹ 2,00,000 (Rupees Two lakhs only) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red them to be considered as Person resident in India and thus, they did not require any permission from the Reserve Bank of India to purchase immovable property in India. (vi) The Respondent authority has also failed to consider that no material has been placed on record to show that the amount of ₹ 2,15,21,972/- had been brought in India in violation of the provisions of and Regulations of FEMA. Thus, the allegations themselves are incapable of being sustained inasmuch as the basic ingredients and requirements of the provision of law invoked have not been met nor any material produced to that effect. Hence, the confirmation granted to the allegations made in the show- cause notice is an abuse of justice and ought to be set aside. (vii) The Respondent also erred in not questioning the investigation done by the Directorate of Enforcement on account of the contradictions contained in the Complaint filed. On one hand an allegation has been made by the Directorate against the Appellant Nos. 2 and 3 that they had purchased an immovable property ad measuring 3237 sq. ft. in Bangalore for a consideration of ₹ 50,00,000/-, and on the other h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leave to raise additional grounds in support of this Appeal if found necessary. 11. In the net-shell the case of the appellants was that the appellants were residing in India for more than182 days in the previous financial year at the time of setting up of business and purchase of property in India. Thus, they satisfied the definition of the term Person resident in India as contemplated under Section 2(v) of the Foreign Exchange Management Act, 1999 and therefore there was no impediment to purchase and hold property in India nor did they require any permission from the Reserve Bank of India to purchase immovable property or to set up any business in India. The property was purchased on 01.09.2009 more than a year after they entered India under a valid Visa. It is specifically alleged that the documents/allegations as made out in the complaint/ Impugned order are vague as nothing was placed on record to show that ₹ 2,15,21,972/- was brought in India in violation of FEMA. 12. The appellants issued a valid Business Visa by the Embassy of India, Seoul which Business Visa was valid from 28.07.2008 to 27.07.2009 and thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority. The said two (2) FIRC certificate disclose that on 26.08.2009, two inward remittances were received. The consideration was received through the legal channel and the purpose of remittance was disclosed to the Bank. This was also taken note of by the Adjudicating Authority in paragraph no. 15. Copy of the said foreign inward remittance is also enclosed as Document no. 4. 15. Joy of India, the first appellant was assessed for Income Tax and the first appellant was assigned PAM number AAFFT5802L and had filed Income Tax returns for the assessment year 2010-2011 to 2014-2015 and even for subsequent years up till 2017-2018. This has been taken note of by the Adjudicating Authority (internal page 4 and paragraph 14) while passing the impugned order. 16. As far as amount is concerned, the amount came in as donations came in India as gifts through the legal route and were for the purposes of furthering the objectives of their social cause. Even in the Complaint, it was mentioned that Appellants purchased the immovable property for ₹ 50,00,000/- but later on it was mentioned that the property was purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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