Tamil Nadu

One more alleged benamidar of Sasikala moves HC against I-T department action

V.S.J. Dinakaran, co-owner of Spectrum shopping mall at Perambur in Chennai, has approached the Madras High Court contesting the Income Tax Department's claim that he was among the benamidars of former Chief Minister Jayalalithaa’s jailed aide V.K. Sasikala.

Justice R. Mahadevan on Thursday directed the Income Tax department to file a detailed counter affidavit within two weeks to his writ petition challenging proceedings initiated under the Prohibition of Benami Property Transactions Act of 1988.

After The Hindu had, in December last, reported extensively the Income Tax department’s claim of Sasikala having used ₹1,911 crore of demonetised currency notes to purchase malls and mills, a number of her alleged benamidars had begun to approach the Madras High Court one after another.

In his plea, Mr. Dinakaran said he was primarily involved in the business of money lending, chit fund and trading of waste paper. Denying that he was a benamidar of Sasikala with respect to Spectrum Mall, he said the mall was actually a joint venture between Ganga Foundations Private Limited and two other landowners D.V. Balaji and I. Shanmugadurai.

On June 27, 2011, the petitioner had purchased an undivided share of 4,554 sq ft in the mall from Mr. Shanmugadurai for a valid consideration. In January 2012, he purchased 6,581 sq ft more and also bought one of the shops in the mall.

Claiming ignorance about any possible transaction between other promoters of the mall and Sasikala, his counsel M.R. Venkatesh asserted that the petitioner was personally not involved in any such transaction. He said there was nothing on record to involve his client in the issue.

The Income Tax officials had neither produced any MoU with respect to Spectrum Mall nor proved that his client had deposited any cash in his bank accounts. No proceedings for capital gain had also been initiated so far, he told Justice Mahadevan before M. Sheela, Special Public Prosecutor for the Income Tax department, undertook to file a detailed counter affidavit.

Case history

After the death of Jayalalithaa on December 5, 2016, the Supreme Court found Sasikala and her sister-in-law N. Ilavarasi guilty in a disproportionate assets case and sentenced them to four years of imprisonment on February 14, 2017.

However, in October 2017, Sasikala came out on emergency parole for five days to meet her then ailing husband M. Natarajan.

Then, she stayed in the residence of her niece J. Krishnapriya at Habibulla Road in T. Nagar.

Suspecting that the real reason behind obtaining parole was to take stock of alleged financial transactions that were carried out after the demonetisation of ₹500 and ₹1,000 currency notes on November 8, 2016, the Income Tax department searched the residence.

The search supposedly led to the discovery of photographs of the front and back pages of a single loose sheet from Ms. Krishnapriya’s mobile phone. The sheet contained a list of properties and different figures written across those names with the suffix ‘paid’ and ‘to be paid’ and the niece reportedly conceded to have taken the photographs when her aunt was residing in her house.

After a few more searches at connected places and obtaining statements from people involved, the department felt that a novel modus operandi appeared to have been adopted by Sasikala, after demonetisation, to spend huge cash stash of ₹1,911 crore stored in carton boxes at various places in Chennai and the Kodanad Estate owned jointly by her and Jayalalithaa.

Of the total amount, ₹1,674 crore was used for purchasing properties and the rest of ₹237 crore, also in demonetised notes, was given as loan to government contractor T.S. Kumarasamy of Tiruchengode-based Christy Friedgram Industry, which supplies provisions for the nutritious meal scheme in government schools, the I-T department claimed.

Promoters of high value properties such as shopping malls, paper mills, wind mills and resorts in Chennai, Coimbatore, Kancheepuram, Puducherry and Madurai were the targets for the crime. After finding that they were desperate to sell their properties but unable to get good offers, she allegedly agreed to pay a handsome amount on condition that it would be in demonetised notes.

The promoters agreed for the deal and accepted the demonetised notes. A part of the cash receipts was used by them to settle loans of smaller amounts they had obtained from different individuals and the rest was deposited in their bank accounts by falsifying other business transactions since the Centre had granted time till December 30, 2016 for depositing demonetised notes in bank accounts.

The transactions were carried out after making the promoters sign individual Memorandum of Understanding (MoU), acknowledging the receipt of money, but none of those documents contained the name of the purchaser. Since the MoUs had neither resulted in registration of sale deeds nor transfer of shares, the I-T department termed the promoters to be her benamis.

However, denying that they were benamis, some of the sellers approached the High Court stating that the entire transaction carried out with them was a ploy to convert black money into white. After the MoUs were signed and the demonetised notes were deposited in bank accounts, Sasikala’s associates cancelled the deals and sought return of money, they claimed.

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Printable version | Aug 16, 2020 2:43:36 AM | https://www.thehindu.com/news/national/tamil-nadu/one-more-alleged-benamidar-of-sasikala-moves-hc-against-i-t-department-action/article31919127.ece

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