[image: Shah Rukh Khan]Shah Rukh Khan

The income tax (I-T) department has provisionally attached actor Shah RukhKhan’s Deja Vu Farms Pvt Ltd located at Alibag, a beach town inMaharashtra. The attachment notice was issued under the Prohibition ofBenami Property Transactions Act (PBPT) in December.

Confirming the development, a senior I-T officer said that under Section 24of the Act if the investigating officer believed that the person isbenamidar, he can issue the attachment notice to that person or beneficialowner (if identity is known).

The law says that the attachment of the property can be done for a periodnot exceeding 90 days from the date of issuance of the notice, he explained.

The circle rate of the attached property is Rs 146.7 million. However, themarket price would go up to five-fold, said another I-T official.

Considered a luxury property, the farmhouse is spread over an area of19,960 sq metres. It has amenities such as a swimming pool, beach andprivate helipad.

An e-mail sent to Shah Rukh Khan’s (SRK’s) company Red ChilliesEntertainment and Kolkata Knight Riders’s chief executive officer onJanuary 24 remained unanswered despite several reminders.

The major allegation against SRK is that he had made an application topurchase agricultural land for farming, but instead constructed a farmhouseat Alibag for personal use. “The said transaction falls under thedefinition of “benami transaction as per the Section 2 (9) of the PBPT Act,where Deja Vu Farms has acted as benamidar for the ultimate benefits ofSRK. Thus, the actor is a beneficiary for the said under the prescribedlaw,” said I-T investigation report submitted to adjudicating authoritywhile seeking provisional attachment.

Business Standard has reviewed the copy of attachment and the investigationreport.

The report highlights that the Maharashtra Tenancy and Agricultural LandsAct bars transfer of agricultural lands to non-agriculturists without thepermission of the collector or state government. The report further saidthat the intention behind incorporating Deja Vu was to purchaseagricultural lands which at present were being used by SRK as hisfarmhouse. Since Khan could not have purchased the said land in hisindividual capacity, a mechanism was devised in the form of Deja Vu, whichshowed its activity as farming.

Citing the filings with the Ministry of Corporate Affairs, I-T said thatDeja Vu Farms was incorporated by two shareholders– Srinivas Parthasarathyand Somasekhar Sundaresan in the year 2004. In December 2004, the sharetransfer certificates were signed by the first shareholders in the name ofShah Rukh Khan and Gauri Khan. The first director was replaced by threedirectors–Ramesh Chhiba, Savita Chhiba and Moreshwar Rajaram Ajgaonkar onthe same day, the report noted.

Further, SRK lent an unsecured loan of Rs 84.5 million to Deja Vu Farms.

Since it was an agricultural land, during the time of representation,Ajgaonkar declared himself as an agriculturist. Accordingly, the additionalcollector allowed the purchase of land with a condition that the land wouldbe put to use within three years for the purpose of farming.

In 2011, Namita Chhiba was appointed as director of Deja Vu in place ofAjgaonkar.

The I-T investigation said that till date, the company had not shown anyincome from farming activity. The investigation report suggests that allthe unsecured loans from SRK were being used towards the purchase of landby Deja Vu.

The report emphasised that Ramesh Chibba, Savita Chibba and Namita Chibbaare Shah Rukh Khan’s father-in-law, mother-in-law and sister-in-law,respectively.

The only income source of the farm was by way of the loan which wasadvanced by SRK to his company, which ultimately was owned by the actorhimself.

The report alleged that the control of the company was always with SRK asthe directors are relatives of the actor.

“Any person aggrieved by the order of the adjudicating authority of holdingthe property as benami or not, can file an appeal to the appellate tribunalwithin 45 days from the date of the order. An appeal against the order ofthe tribunal may be preferred in the High Court within 60 days,” explainedofficial cited above.

The issue came into spotlight when district collector Vijay Suryavanshiclaimed that a bungalow purportedly owned by actor along the Thal seafrontin Alibag was among 87 farmhouses on which his office had sought legalopinion so that it could take action for alleged Coastal Regulatory Zone(CRZ) violations.

Finance Ministry said earlier this month that the I-T department hadstepped-up actions under the PBPT Act, which provides for provisionalattachment and subsequent confiscation of benami properties, whethermovable or immovable. It also allows for prosecution of the beneficialowner, the benamidar and the abettor to benami transactions, which mayresult in rigorous imprisonment up to seven years and fine up to 25 percent of fair market value of the property.The statement added that the department has also set up 24 dedicated benamiprohibition units under its investigation directorates all over India inMay 2017 to ensure swift action.