Former Chief Minister Jayalalithaa’s close aide V.K. Sasikala has claimed to have become the proprietrix of all their partnership firms, including the sprawling Kodanad Estate.
The statement has been made at a time when the question over who would inherit properties left behind by the AIADMK leader after her death on December 5, 2016, remains unanswered.
Extensive searches
In reply to a notice issued by the Income Tax department, Sasikala’s chartered accountants, on December 11, said their client was a partner in Kodanad Estate, Royal Valley Floritech Exports, Green T Estate, Sri Jaya Publications and Sasi Enterprises till December 5, 2016, when the partnership firms stood dissolved.
She continued the business activities as proprietrix thereafter.
The need for the reply arose after I-T sleuths conducted extensive searches in Veda Nilayam, the Poes Garden residence in Chennai, where Jayalalithaa resided along with Sasikala, their business establishments and the residences of the latter’s relatives in November 2017 and recovered several incriminating documents besides recording sworn statements of many witnesses.
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The raids were conducted a month after Sasikala came out on five-day parole from the Karnataka prison, where she has been lodged since February 2017 after being convicted and sentenced to four years of imprisonment in a disproportionate assets case.
The raids led to the discovery of documentation for over ₹1,900 crore of demonetised notes used to purchase properties and advance loan in 2016.
Though Sasikala was confronted with the seized materials in the prison on December 13 and 14, 2018, she simply denied having any knowledge of the department’s claim of having used ₹1,674.50 crore of demonetised notes to purchase properties and lending another ₹237 crore on condition that the borrower should return it in new currency within a year or suffer interest.
A notice was issued to her on October 15 to show cause by October 22 as to why the money should not be declared as her undisclosed income.
However, her chartered accountants wrote back on October 22 stating that they received the notice only on October 19 and therefore it was impossible for them to submit a detailed explanation within three days.
Since the assessee was in prison and access to her was limited, they required 30 days of time to submit the explanation. The I-T department initially granted them 15 days of time. Thereafter, there were repeated requests for more time and finally on December 11, a detailed explanation was submitted feigning complete ignorance about purchase of properties and advancing of loan.
The explanation stated that Sasikala’s revenue mainly consisted of income from “house property, business and other sources.”
Listing out particulars of all investments held by the assessee in various businesses during the assessment years 2016-17 and 2017-18, it said she was the proprietrix of Namadhu MGR, which runs the news daily Dr. Namadhu MGR and Jaya Printers.
She also claimed to have been a partner in Jay Farm Houses, J S Housing Development, Jay Real Estate and Green Farm House.
Further, she was said to be a partner in Kodanad Estate and four other firms along with Jayalalithaa from April 1, 2016 to December 5, 2016, when the latter died, she claimed to have become proprietrix after the partnership stood dissolved.
Apart from these, Sasikala was a director in Indo Doha Chemicals and Pharmaceuticals Limited and Anjaneya Printers Private Limited. She also held 41.66 lakh shares in Jazz Cinemas Private Limited, 3.6 lakh shares in Array Land Developers Private Limited and 7.02 lakh shares in Mavis Satcom Limited. She owned 36,000 shares in Ramraj Agro Mills Private Limited.
Charges denied
Strongly objecting to the claim that she had been in possession of over ₹1,900 crore worth currency notes in the denomination of ₹ 500 and ₹1,000, which were demonetised on November 8, 2016 and allowed to be deposited in bank accounts only till December 30, 2016, Sasikala said she had neither purchased properties nor advanced loan using demonetised currency notes.
In so far as a notebook seized from Veda Nilayam with entries to the tune of ₹7.64 crore was concerned, the explanation stated that those entries were related to partnership firms Kodanad Estate, Royal Valley Floritech Exports and Green T Estate relevant up to August 2, 2016, a month before Jayalalithaa was admitted to Apollo Hospitals.
‘Merely a partner’
Further, the December 11 explanation made on behalf of Sasikala went on to state: “The transactions denoted by the aforesaid entries (in the notebook seized from Veda Nilayam) pertain to the aforesaid firms, of which the assessee was merely a partner during the aforesaid assessment year and the said firms were assessed to tax separately.”
“On the demise of Jayalalithaa, the other partner, on December 5, 2016, the assessee continued the business activities as proprietrix from December 6, 2016. There was not much activity during the period between December 6, 2016 and March 31, 2017. Further, the assessee denies any sort of payments sent from Chennai to the aforesaid firms.”
