[image: Shah Rukh Khan] Shah Rukh Khan
The income tax (I-T) department has provisionally attached actor Shah Rukh Khan's Deja Vu Farms Pvt Ltd located at Alibag, a beach town in Maharashtra. The attachment notice was issued under the Prohibition of Benami Property Transactions Act (PBPT) in December.
Confirming the development, a senior I-T officer said that under Section 24 of the Act if the investigating officer believed that the person is benamidar, he can issue the attachment notice to that person or beneficial owner (if identity is known).
The law says that the attachment of the property can be done for a period not 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, the market price would go up to five-fold, said another I-T official.
Considered a luxury property, the farmhouse is spread over an area of 19,960 sq metres. It has amenities such as a swimming pool, beach and private helipad.
An e-mail sent to Shah Rukh Khan’s (SRK’s) company Red Chillies Entertainment and Kolkata Knight Riders's chief executive officer on January 24 remained unanswered despite several reminders.
The major allegation against SRK is that he had made an application to purchase agricultural land for farming, but instead constructed a farmhouse at Alibag for personal use. “The said transaction falls under the definition 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 of SRK. Thus, the actor is a beneficiary for the said under the prescribed law,” said I-T investigation report submitted to adjudicating authority while seeking provisional attachment.
Business Standard has reviewed the copy of attachment and the investigation report.
The report highlights that the Maharashtra Tenancy and Agricultural Lands Act bars transfer of agricultural lands to non-agriculturists without the permission of the collector or state government. The report further said that the intention behind incorporating Deja Vu was to purchase agricultural lands which at present were being used by SRK as his farmhouse. Since Khan could not have purchased the said land in his individual capacity, a mechanism was devised in the form of Deja Vu, which showed its activity as farming.
Citing the filings with the Ministry of Corporate Affairs, I-T said that Deja Vu Farms was incorporated by two shareholders-- Srinivas Parthasarathy and Somasekhar Sundaresan in the year 2004. In December 2004, the share transfer certificates were signed by the first shareholders in the name of Shah Rukh Khan and Gauri Khan. The first director was replaced by three directors--Ramesh Chhiba, Savita Chhiba and Moreshwar Rajaram Ajgaonkar on the 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 additional collector allowed the purchase of land with a condition that the land would be put to use within three years for the purpose of farming.
In 2011, Namita Chhiba was appointed as director of Deja Vu in place of Ajgaonkar.
The I-T investigation said that till date, the company had not shown any income from farming activity. The investigation report suggests that all the unsecured loans from SRK were being used towards the purchase of land by Deja Vu.
The report emphasised that Ramesh Chibba, Savita Chibba and Namita Chibba are 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 was advanced by SRK to his company, which ultimately was owned by the actor himself.
The report alleged that the control of the company was always with SRK as the directors are relatives of the actor.
“Any person aggrieved by the order of the adjudicating authority of holding the property as benami or not, can file an appeal to the appellate tribunal within 45 days from the date of the order. An appeal against the order of the tribunal may be preferred in the High Court within 60 days,” explained official cited above.
The issue came into spotlight when district collector Vijay Suryavanshi claimed that a bungalow purportedly owned by actor along the Thal seafront in Alibag was among 87 farmhouses on which his office had sought legal opinion so that it could take action for alleged Coastal Regulatory Zone (CRZ) violations.
Finance Ministry said earlier this month that the I-T department had stepped-up actions under the PBPT Act, which provides for provisional attachment and subsequent confiscation of benami properties, whether movable or immovable. It also allows for prosecution of the beneficial owner, the benamidar and the abettor to benami transactions, which may result in rigorous imprisonment up to seven years and fine up to 25 per cent of fair market value of the property. The statement added that the department has also set up 24 dedicated benami prohibition units under its investigation directorates all over India in May 2017 to ensure swift action.