BOLLYWOOD is still reeling from the shock. In what was one of the biggest search-and-seizure operations in recent years, on December 18, 150 income-tax officials swooped down on the residences of leading film personalities like Shah Rukh Khan, Karishma Kapoor, Madhuri Dixit, Sunil Shetty, Pooja Bhatt, Kumar Sanu, K.C. Bokadia and director David Dhavan.
The raids created a fair share of turbulence. Shah Rukh Khan's wife was heard screaming at the sleuths as they upset her kitchen. They finally prised out nearly Rs 3 crore from a bedroom. Madhuri Dixit's father was shaken up after his house was ransacked, especially as the actress was out of town. Currency notes found in his water tank were an embarrassment for Kumar Sanu. Karishma Kapoor could not explain the recovery of Rs 5 lakh and jewellery from the false ceiling of one of her seven houses. Actors Ajay Devgan and Sunil Shetty were tightlipped about the couple of crores found in their respective homes.
Soon panic spread to all and sundry. Shootings of leading stars like Amitabh Bachchan and Govinda were cancelled a day later. Sources say the stars were busy sorting out their possessions. Actress and recently-turned producer, Pooja Bhatt, is rumoured to have literally thrown cash out of her window in true filmi style. Yet cash and jewellery worth Rs 4.5 crore were recovered from her, her father, director Mahesh Bhatt, and uncles.
Says O.P. Srivastava, director general (investigations): "We found cash, jewellery and documents which provide substantial evidence of tax evasion." Ironically, even Shah Rukh Khan, who was felicitated sometime back by the Income Tax (IT) department as the highest individual income-tax payer, has been found defaulting.
While the actual figures will be known only after the account books are studied in detail, tinsel land asserts that business is as usual. Says Sunil Manchanda, joint managing director, MAD Entertainment Ltd, which categorically claims that all transactions are 'white' and accounted for: "Any industry that has a cash component is aware of the chances of the IT department's checks."
It's neither new nor surprising. The IT department has kept a watchful eye on the industry for years. Actors, producers, financiers have all been targets. Subhash Ghai, for one, was raided after a string of hits. More recently, the raids on ABCL and its associates further alerted the industry. Shah Rukh Khan, has in the past had a shop he owned seized on grounds of underevaluation. His much publicised purchase of a coveted sea-facing property in Mumbai for Rs 10 crore has drawn considerable attention, never mind that the payment is deferred.
Nevertheless, the business or popularity of the stars has hardly been affected. An insider says that almost nobody is in "real trouble". In fact, feels a distributor, this "free publicity" can only help. Says another distributor: "Even the audiences comprise people who are finding ways and means of beating a demanding tax system and don't consider evasion of income tax beyond a point as a moral crime. " Justifies a distributor: "There is no social security in India. For a star with a limited professional life span this could be disastrous." Evading taxes is no major offence, he feels.
With no adverse effect on their market price, the raided are only worried about any immediate financial loss or probable delay in on-going productions due to paucity of cash. Agrees Manisha Koirala, a leading actress who feels her IT payments are commensurate with her income: "The IT department is most welcome to raid my house. I do not find it an intrusion or feel offended or afraid." Mahesh Bhatt is known to have perversely revelled that the raid has finally placed him in the ranks of his childhood film idols.
But behind the veneer of calmness Manchanda has noticed a tangible change. Though this has a lot to do with companies like MAD getting more professional and offering only cheque payments, there is a veritable drop in the cash component of compensation. Income through other activities like stage shows and advertisements are, in most cases, accounted for and can't be concealed.
Producers agree that of late most of them are increasingly keeping their books in order. MAD, for instance, updates them daily and has a complete expense tab ready before a film is released. After an open inquiry into the earnings of his blockbuster, Dilwale Dulhaniya Le Jayenge, producer Yash Chopra volunteered to pay an advance tax on an estimated income of about Rs 20 crore in 1995-96.
Even if there is no fear psychosis, industry folk are fast realising that they are not infallible off the silver screen. As more and more of their brethren bite the dust, they are starting to learn from their mistakes. And taking the necessary precautions too. The current round of raids will serve to make them even more cautious.
