Sasikala’s benami transactions: I-T dept. initiates proceedings Justice Anita Sumanth on Thursday directed senior standing counsel for Income Tax A.P. Srinivas and A.N.R. Jaya Prathap to ensure that counter affidavits were filed in reply to all six writ petitions, five by individual shareholders and one by Bonjour Bonheur Private Limited, on or before February 19.


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TAMIL NADUSasikala’s benami transactions: I-T dept. initiates proceedings

Mohamed Imranullah S.07 FEBRUARY 2020 01:34 ISTUPDATED: 07 FEBRUARY 2020 01:34 IST


 
 
 
 
Invokes Prohibition of Benami Properties Transaction Act of 1988
The Income Tax department has initiated proceedings under the Prohibition of Benami Properties Transaction (PBPT) Act of 1988 to attach all immovable properties that were reportedly purchased by former Chief Minister Jayalalithaa’s close aide V.K. Sasikala in Chennai, Coimbatore, Kancheepuram, Puducherry and Madurai using demonetised currency notes to the tune of ₹1,674.50 crore in 2016.
Consequently, shareholders of Puducherry-based Sri Lakshmi Jewellery group’s Bonjour Bonheur Private Limited, which owns the Ocean Spray Beach Resort, supposedly sold to her for ₹168 crore, have rushed to the Madras High Court challenging an order passed by U.N. Dilip, Deputy Commissioner of Income Tax (Benami Prohibition), on January 20 this year for attachment of their properties under the PBPT Act.
Justice Anita Sumanth on Thursday directed senior standing counsel for Income Tax A.P. Srinivas and A.N.R. Jaya Prathap to ensure that counter affidavits were filed in reply to all six writ petitions, five by individual shareholders and one by Bonjour Bonheur Private Limited, on or before February 19.
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In his proceedings, the Deputy Commissioner had stated that the petitioners had conceded to have received at least ₹148 crore, out of the total sale consideration of ₹168 crore, in cash after the Centre demonetised old currency notes in the denomination of ₹500 and ₹1,000 on November 8, 2016, and gave time till December 30, 2016, for all those who were in possession of such notes to deposit them in their bank accounts.

Utilising the opportunity, the petitioners, belonging to Pondicherry Sri Lakshmi Jewellery group, deposited the demonetised notes in their bank accounts by falsifying business transactions and claiming it to have been earned through their jewellery business. Even after receiving the money, they had not transferred the ownership of the resort to Sasikala till date and hence it amounts to a benami transaction, the officer had concluded.
Denying the charge, the director of Bonjour Bonheur, N. Naveen Baalaji told the court that in 2016, the family business was failing. Hence, they decided to sell the resort and got introduced to Sasikala’s lawyer S. Senthil through Kumar, the then personal assistant of incumbent Industries Minister M.C. Sampath. The lawyer informed them that he was negotiating the deal on behalf of Sasikala and fixed the sale consideration at ₹168 crore.
“The entire transaction was supposed to happen through bank transfer for the reason that the transfer was mainly intended to settle of all the existing loans of Pondicherry Sri Lakshmi Jewellery and the resort. In the meanwhile, the Central government declared the existing ₹500 and ₹1,000 notes as illegal tender. Since there was no word from the proposed buyer, the company was of the honest opinion that the transactions would take place only in 2017.
“However, on November 22, 2016, Mr. Senthil, advocate, came along with his associates and instructed the petitioner and other promoters of the company to sign a memorandum of understanding. The MoU was, however, incomplete as the name of the buyer was left blank. The petitioner and other promoters were not allowed to read the MoU nor allowed to take a photo copy. They were also asked to hand over their original share certificates to Mr. Senthil,” the affidavit of Mr. Baalaji read.
He also claimed that on the same day, the shareholders of the resort were forced to accept ₹148 crore in demonetised currency notes. “Though the said amount was blatantly refused by the petitioner and other promoters, it was informed that such amount could be returned if it could not be put to use,” the petitioner said and claimed that Kumar took ₹12 crore of the cash for having brokered the deal and another ₹75 lakh was found missing when they counted the cash.
Therefore, effectively, the family got only ₹135.25 crore of which a major portion was infused against stock drawings in various firms and deposited in different bank accounts. When the family expressed its inability to deposit about ₹37 crore of the demonetised notes in the bank accounts, Mr. Kumar informed that the deal for the sale of the resort stands cancelled and demanded that the family should return around ₹100 crore in new currency notes.
He also told them that their share certificates would be returned only if they pay back the money. Even before the family could arrange the money, the Income Tax raided their premises, he said and contended that the entire narration would prove that the nature of the transaction could not be termed as benami transaction.

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