The Income Tax department has provisionally sealed Bollywood Baadshah Shah Rukh Khan‘s Alibaug farmhouse. The notice was issued under the Prohibition of Benami Property Transactions Act (PBPT) in December.
Confirming the development, a senior IT officer told Business Standard 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. The farmhouse is spread over an area of 19,960 sq metres and includes swimming pool, beach and private helipad.
To note, the IT sent notice to SRK’s company Red Chillies Entertainment and IPL franchise KKR chief executive officer on January 24 but no answers were given despite several reminders. Meanwhile, the major allegation against Shah Rukh includes, 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.”
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. 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 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.
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.