Shah Rukh Khan once again faces tax woes after his benami property comes under Income Tax scanner

By Vandana Srivastawa

on March 18, 2019

Shah Rukh Khan may not be having a great time with his films at the box office but he is still one of the richest stars in Bollywood. He had come under the Income Tax Department’s scanner and opposed a 2018 order by the Adjudicating Authority in 2018. At that time he had got relief in the case in which he was alleged to the be owner of a benami property. The IT department mounted the challenge after the Adjucating Authority dismissed the case against the actor and had slammed the IT department for calling a property acquired by SRK’s firm as ‘benami’.

The government has become very strict on owners of such ‘benami’ properties after the amendment in 2016 was made to crack down on illegal practices for tax evasion. As per the Act if an individual is proven guilty then they can be sent to prison for upto seven years and will have to pay a fine of 25% of the fair market value of the alleged property. Under this act both the benamidar (in whose name the benami property is standing) and beneficiary (who pays for the same) are prosecutable.

[caption id="attachment_203221" align="aligncenter" width="800"] Shah Rukh Khan photographed in Mumbai[/caption]

Shah Rukh’s name is the first and most prominent name filed under the Benami Property Act. Shah Rukh’s farmhouse is the property that is under scrutiny. It came under scanner when the Maharashtra DC wanted to know the details about Coastal Regulations violations of 87 properties including his in Alibaug. Apparently, SRK had bought it for agricultural purposes but eventually constructed a farmhouse on it. The farmhouse’s value was assessed to be at Rs 15 crores in 2018.

The IT department termed the company, Deja Vu Farms Pvt, a benamidar, and SRK a beneficiary of a benami deal under the Prohibition of Benami Property Transaction Act. However, the Adjucating Authority had dismissed the IT department’s claims saying, "A commercial transaction entered into course of business by an independent entity cannot be coloured as benami transaction because it had sourced the funds from loans."