Amount received in excess of amount received from TPE can’t be prima facie termed as proceeds of Crime liable to be confiscated or for Compensation: Delhi HC

Delhi High Court - TPE - Taxscan

The Delhi High Court held that the amount received in excess of the amount received from TPE cannot be prima facie termed as proceeds of the crime liable to be confiscated or for compensation.

The petitioners, Ravina and Associates Pvt. Ltd. were maintaining accounts with National WestMinister Bank, London which had been frozen by the order of the Special Court and could not be operated, the Income Tax Department sought recovery of the outstanding tax demand from the amounts lying deposited.

According to the Income Tax Department, since the petitioners were maintaining accounts with National WestMinister Bank, London which had been frozen by the order of the Special Court and could not be operated, the Income Tax Department sought recovery of the outstanding tax demand from the amounts lying deposited.

Mr. Kapil Sibal, the counsel on behalf of the petitioner  contended that even as per this charge-sheet, the entire amount received which was frozen and received in India lying deposited in the name of learned Special Judge at SBI, Tis Hazari is not the amount transferred by TPE in relation to this transaction only. Even as per the CBI there was one more transaction between TPE and the petitioners. Therefore, the amount which does not relate to the impugned transaction along with the interest accrued thereon be directed to be released to the income-tax authorities and in respect of the further amount of tax liability, the petitioner is willing to furnish an affidavit that in case the petitioners are convicted and the amount liable to confiscation, the same will be deposited by the petitioners.

The single Judge bench of Justice Mukta Gupta noted that as per the status report filed by the CBI, the amounts transferred by TPE to RAPL in the NatWest Bank, London account, in relation to the impugned transaction are mentioned in entries 2 and 3 above, totalling to a sum of USD 2,15,71,843.90. However, the amount which was frozen and received in India is beyond the amount in relation to impugned transactions with TPE. The amount received in excess of the amount received from TPE by RAPL qua the impugned transaction cannot be prima facie termed as case property or the proceeds of the crime liable to be confiscated or for compensation in case the petitioners are charged and convicted. Consequently the learned Special Judge is directed to retain the amount received in lieu of the frozen amount of USD 2,15,71,843.90 alongwith the interest accrued thereon from the date of receipt till date and transfer the balance amount alongwith the interest accrued thereon received in the account at SBI, Tees Hazari, to the income-tax department.

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