Cobrapost (New Delhi): Analysis of statutory filings, including annual reports, and relevant MCA records reveals that DLF Limited helped three members of the Chaurasia clan of the Kamla Pasand Group rake in Rs. 52.45 crore. This fortune came rolling to them on a platter out of a deposit of Rs. 10 crore they had put in the real estate behemoth supposedly for buying some plots of land. It appears that for this fortune to materialize in just under four years, an elaborate schematic was put in place for it. First, a shell entity going by the name of Blossom Farming Estates LLP was set up by Ayushi Chaurasia, Vijay Anand Chaurasia, and Mayank Chaurasia in February 2016. Second, within three months, all three kin and their uncle Anand Kumar Chaurasia put in Rs. 15.11 crore into the entity. Third, Rs. 10 crore was deposited with DLF Limited for the purchase of plots. Six MOUs were signed with six DLF entities for the express purpose of investment, including DLF Limited, the flagship of the group. But no sale deed was ever executed and no property was transferred to the Chaurasia-owned entity. Three years later, these DLF entities paid a compensation of Rs. 52.45 crore, over and above Rs. 10 crore initially deposited.

On the surface nobody would find anything wrong and they would sure say there is no hanky-panky. Just scratch the surface a little and how this fortune was made becomes clear. Not a single sale deed was registered and no property was transferred, even though we learn that the DLF entities signed the MoU cancellation deed to pay Rs. 62.45 crore. Surprisingly, the compensation was entered into the books as 'professional fees' by the paying DLF entities. Soon after the compensation was paid, DLF Limited wiped out these related entities from its records through merger and demerger.

A familiar playbook that, in Cobrapost's experience, big corporates use to cover such questionable transactions.

Cobrapost analysis led to several startling findings which are summed up as follows:

1. Ayushi Chaurasia, Vijay Anand Chaurasia, and Mayank Chaurasia set up Blossom Farming Estates LLP. A total of Rs. 15.11 crore was pooled into the entity.
2. Blossom Farming Estates LLP entered into a series of MoUs to purchase plots of land from DLF Limited and five of its subsidiaries – DLF Property Developers, DLF Real Estate Builders, DLF Residential Partners, DLF Residential Developers, and DLF Utilities Limited.
3. The Chaurasias created security deposits worth Rs. 10 crore for the purpose.
4. Three years later, Blossom Farming Estates LLP was paid Rs. 52.45 crore, more than five-fold return on an investment of Rs. 10 crore, in under four years in FY 2019–20.
5. Not a single sale deed was registered. No property was transferred in the name of the buyer, either, even though DLF entities signed a deed of cancellation to annul the MoUs before the total sum of Rs. 62.45 crore was paid to the entity.
6. It is apparent that the arrangement existed only on paper.
7. DLF Limited and its related entities made payouts below the threshold of material transactions – ranging from the lowest of Rs. 3.44 crore by DLF Utilities Limited to the highest Rs. 13.64 crore by DLF Limited.
8. Surprisingly, the compensation paid to Blossom Farming Estates LLP was entered into the books by the paying DLF entities as 'professional fees'
9. Sometime after making the payouts, DLF Limited moved to merge or restructure the sister entities involved, making the payments far harder to trace.
10. The architecture of the deal – a five-fold 'compensation' on cancelled MOUs, split six ways and routed through a one-event farming LLP – raises the question if it amounts to an 'impermissible avoidance arrangement' under the General Anti-Avoidance Rules (GAAR) of the Income-tax Act, in force since assessment year 2018-19.
11. Among all the three partners of Blossom Farming Estates LLP, Ayushi Chaurasia walked away with a lion's share of the compensation.
12. Ayushi went on a foreign currency buying spree the same year as the compensation materialized. Beginning in 2019-20, the foreign currency purchases and remittances amounted to about Rs. 30.47 crore by 2024-25.
13. Strangely, Ayushi began making statutory filings as a non-resident from assessment year 2023-24, backed by a United Arab Emirates Tax Residency Certificate and a Za'abeel, Dubai address.
14. Ayushi also declared short-term capital gains of Rs. 12.05 crore in assessment year 2016-17 on consideration of about Rs. 13.99 crore against a cost of about Rs. 1.95 crore. By 2020–21, she held a securities portfolio of Rs. 58.80 crore, which later peaked to Rs. 78 crore.

The manner in which DLF Limited and five of its sister entities paid the Chaurasia farming LLP an unjustifiable compensation of Rs. 52.45 crore and then wiped the entities involved out of existence needs to be investigated for violation of SEBI's LODR Regulations and the Companies Act 2013. The foreign currency transactions of Ayushi Chaurasia violate certain provisions of the Foreign Exchange Management Act (FEMA). A non-resident is expressly barred from investing in any entity that is engaged in agriculture. As the Chaurasia's entity's name suggests, Blossom Farming Estates LLP cannot be a vehicle for investment by a non-resident under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. These transactions fall under the category of related-party transaction and appear to violate Section 188 of the Companies Act, 2013 and Ind AS 24 of the Indian Accounting Standards. The overall design also appears to invite scrutiny under the General Anti-Avoidance Rules in Chapter X-A of the Income-tax Act, 1961, as discussed in Section E above.

Here is how the whole schematic was brought to fruition.

Ayushi Chaurasia, alias Ayushi Shitiz Garg, Vijay Anand Chaurasia, and Mayank Chaurasia, registered Blossom Farming Estates LLP at D-137, New Rajinder Nagar, New Delhi on February 23, 2016 (Certificate of Incorporation Annexure 1). This limited liability partnership firm came into being three months before the launch of the government’s Income Declaration Scheme. As the names suggest, all three founders belong to the Chaurasia family which owns the Kamla Pasand Group. The manufacturers of pan masala, gutkha, fragrant tobacco, and other chewables do not need any introduction. Ayushi held a 50 per cent stake in the farming LLP, Mayank 49.99 per cent, and Vijay Anand 0.01 per cent. While Ayushi, Vijay Anand, and Mayank together put in Rs. 7.61 crore, Anand Kumar, Ayushi's uncle, advanced a loan of Rs. 7.50 crore (Source: Financial Statement of Blossom Farming Estates LLP Annexure 2).

(Source: Financial Statement of Blossom Farming Estates LLP Annexure 2).

Barely five weeks after coming into existence, Blossom Farming Estates LLP entered into a series of MoUs to purchase plots from DLF Limited and five of its subsidiaries – DLF Property Developers, DLF Real Estate Builders, DLF Residential Partners, DLF Residential Developers, and DLF Utilities (Annexure 3: DLF Property Developers Limited Financial Statements for the financial Year 2018-19). Curiously, the newly formed entity placed security deposits with these DLF companies. Out of the total Rs. 15.11 crore put in the entity by all four members of the Chaurasia clan, security deposits worth Rs. 10 crore were created.

According to the Form 8 Statements of Account and Solvency of the farming LLP, this was done in two phases. In the first, 'Security Deposits & Project Expenses' of Rs. 7,00,06,600 were created against unsecured loans of Rs. 7.50 crore. In the second, the deposits rose to a cumulative Rs. 10,00,40,850, created against unsecured loans of Rs. 10 crore. These security deposits were created between 31 March 2016 and 31 March 2017.

The following table explains the capital structure of Blossom Farming Estates LLP between 31 March 2016 and 31 March 2017

(Source: LLP Form 8 of Blossom Farming Estates LLP Annexure 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10).

A. Five-Fold Return Without Sale Deed, Property Transfer

Curiously, the Rs. 10 crore sat there in the books of these DLF entities for three years and turned into a goldmine, as the Chaurasias were paid Rs. 52,45,43,037. More than five-fold return on an investment of Rs. 10 crore. The buyers got a total of Rs. 62.45 crore in under four years in FY 2019–20.

But there are several twists and turns to this get-rich-quick story.

First, there was no sale deed ever registered, there was no plot transferred in the names of the so-called buyers, and there was no possession to have ever passed over to them. Second, the money was returned after the parties signed a Deed of Cancellation. Finally, the compensation amount, which is Rs. 52,45,43,037, was recorded as 'professional fees' in the books of the paying DLF entities. These transactions have been recorded in the financial statements of the DLF entities for the year 2019–20 and other statutory filings (Annexure 5.1, 5.2, 5.3, 5.4, 5.5, 5.6).

It is apparent that the arrangement existed only on paper. Strangely, the MoUs appear in no public filing of either side.

(Source: Financial statements of the six entities for the FY 2019–20, statutory filings, and other relevant records.)

As it can be discerned from the details provided in the table, DLF Limited, DLF Property Developers Limited, DLF Real Estate Builders Limited, DLF Residential Partners Limited, DLF Residential Developers Limited, and DLF Utilities Limited, respectively, paid Rs. 13,64,46,678, Rs. 9,77,17,752, Rs. 9,49,60,602, Rs. 9,07,01,457, Rs. 7,02,36,870, and Rs. 3,44,79,678 to the Chaurasia family entity.

The flow of money from the six DLF entities to Blossom Farming Estates LLP has been shown in the flowchart here.

It is a standard practice if a prospective buyer books a plot of land with any real estate entity and deposits a sum for the purpose, it does not carry any interest or consideration upon cancellation. The real estate firm refunds only the deposited sum, not a single farthing more.

Strangely, in the case of Chaurasias, however, we found an exception. The DLF entities not only returned the deposit of Rs. 10 crore made but also paid their entity Blossom Farming Estates LLP a massive compensation that took the total exit to an upward of Rs. 62 crore. A return of over 500 per cent, and as mentioned earlier the additional payout of Rs. 52.45 crore was recorded as 'professional fees'.

A closer analysis of the details provided in the table above shows us three unmistakable and distinct features of these transactions:

First, although the deposits of Rs. 10 crore were made with DLF Limited, the payout to the farming entity of the Chaurasias was not made by a single contracting entity but was split across six DLF entities.

Second, the payout by each DLF entity was made in smaller chunks. This was done to keep the transactions below the quantitative materiality threshold. By doing so DLF Limited, a listed entity, sidestepped the necessity of statutory disclosures to the stock-exchange. As can be seen from, these payouts ranging from the lowest of Rs. 3.44 crore by DLF Utilities Limited to the highest Rs. 13.64 crore by DLF Limited sit below the threshold of material transactions. Thus, these transactions do not raise any eyebrows.

Third, turnover of the farming LLP of the Chaurasias recorded a single event: near-nil before one spike of Rs. 52,45,43,037 in the year of the receipt of payments, and nil reported turnover in every year from FY 2020–21 through FY 2024–25 (Source : LLP Form 8 of Blossom Farming Estates LLP Annexure 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10)

Other than these transactions, Blossom Farming Estates LLP does not have any business to show, which means it was a shell entity. This leaves us with one big question: Was this entity created for this express purpose only?

B. Where Did All the Money Go: To A New Dubai Resident?

You may be wondering what happened to the money that Blossom Farming Estates LLP made out of thin air. Analysis of records by Cobrapost led to the money trail which throws up some more shocking revelations. Of the Rs. 52 crore received from the DLF entities over and above the deposit of Rs. 10 crore, it is Ayushi Chaurasia who appears to have walked away with a lion's share of the compensation. But not in an usual manner.

At the time the LLP was set up by the Chaurasias and the initial investments of Rs. 15.11 crore were made, Ayushi was 18 years old. She was born in June 1997. Beginning the same year as the compensation materialized, Ayushi went on a foreign currency buying spree. Records also show foreign currency remittance. Put together, these purchases, beginning in 2019-20, along with remittance, amounted to about Rs. 30.47 crore by 2024-25. But there is a twist here again.

Ayushi began making statutory filings as a non-resident from Assessment Year 2023-24, backed by a United Arab Emirates Tax Residency Certificate and a Za'abeel, Dubai address. Her foreign-currency outflows increased sharply the moment the non-resident status was asserted: from roughly Rs. 1.90 crore a year to over Rs. 8.2 crore a year in 2024-25.

The recorded foreign-currency outflows/remittances are tabulated here:

There are some more mysterious transactions.

Ayushi declared short-term capital gains of Rs. 12.05 crore in assessment year 2016-17, when she was eighteen, on consideration of about Rs. 13.99 crore against a cost of about Rs. 1.95 crore . By AY 2020–21 she held a securities portfolio of Rs. 58.80 crore, later peaking above Rs. 78 crore. Ayushi also carries a Bank of Singapore relationship and a Schedule FA foreign-asset book alongside her Rs. 6.99 crore capital balance in Blossom Farming Estates LLP.

Cobrapost has learned from reliable sources that the Indian authorities raised a red flag with regard to all these transactions in 2021.

C. How These Transactions Violate FEMA?

These transactions as shown in Ayushi's filings as an NRI violate certain provisions of the Foreign Exchange Management Act (FEMA). Under Schedule VI of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, a non-resident may contribute capital to an Indian LLP only where the LLP operates in a sector in which 100 per cent foreign investment is allowed on the automatic route. The non-resident is expressly prohibited from doing so where the LLP is engaged in 'agricultural or plantation activity, real estate business (other than development of townships, construction of residential/commercial premises...), construction of farmhouses, or dealing in transfer of development rights'. Paragraph 28 of Schedule I separately bars an NRI or OCI from acquiring agricultural land, plantation property or a farmhouse, directly or through an entity the NRI beneficially controls. In addition, Section 6(3) of FEMA read with the RBI's Master Direction on Immovable Property carries the same prohibition

Blossom Farming Estates LLP is, on its face, a farming-and-estates vehicle that purportedly sought to buy plots from the DLF entities. As the Form 8 and the cancellation deed show, the entity entered plot-purchase MOUs and exited at a premium without executing any sale deed or transfer of the property. If Ayushi was a non-resident when her interest funded agricultural land or the plot MOUs were signed, or if the exit-at-a-premium amounted to trading in immovable-property rights, the contribution runs into a FEMA prohibition carrying a penalty of up to three times the sum involved under Section 13. The paper-only character of the transaction is documentary: no sale deed was ever registered, no possession passed, and no HRERA-registered project of the LLP exists (Annexure 6: HRERA search website print screen). These transactions bear features that warrant investigation for possible round-tripping.

D. How DLF Restructured Four Entities Out of Existence

As has been our experience in recent times while exposing big corporates such as the Anil Ambani-led Reliance ADA Group, Cholamandalam Investment & Finance Company Limited, Dewan Housing Finance Limited, they all go by this playbook: They restructure their group entities through amalgamation and demergers after making all kinds of questionable transactions through them.

Cobrapost analysis suggests that DLF Limited did exactly that soon after paying Rs. 52.45 crore to the Chaurasias' farming LLP, along with Rs. 10 crore that was deposited by them supposedly for the purchase of plots. Here is how it was done: (i) DLF Property Developers Limited was amalgamated into DLF Luxury Homes Limited following an NCLT Chandigarh order dated 24 February 2021, with an appointed date of 1 April 2019, – the start of the financial year of the payment; (ii) a Scheme of Arrangement was filed for the merger of DLF Real Estate Builders Limited (with DLF Phase-IV Commercial Developers and DLF Residential Builders) and the demerger of the real-estate undertaking of DLF Utilities Limited into DLF Limited itself, pending before the NCLT; and (iii) a Scheme of Amalgamation of eight companies into DLF Residential Partners Limited was filed in July 2020 (Annexure 7 & 8: DLF Board's Report FY 2020-21 and FY 2022-23).

DLF has been consolidating a 173-subsidiary structure for years. One may ask what is strange about these mergers and demergers. But the way the four of the six entities involved were, within months of the payment, merged, demerged or restated into successor entities suggests a pattern. The intent is to make tracing Rs. 52.45 crore nigh impossible as the current accounts no longer carry it as a distinct line. (Annexure 9)

Even though DLF Limited could have buried these transactions, audited FY 2019-20 financial statement of DLF Residential Partners Limited, one of the six entities involved, is revealing. The note to its inventories reads:

"During the year Company has signed a deed of cancellation with third party against the previously entered MOU and as a result of such cancellation the company has paid compensation amounting INR 1,070.28 lakhs which is equivalent to increase in circle rate of said plots and company has capitalized the same into the current carrying value of the Inventory."

The statement confirms each structural element of Cobrapost analysis: the MOU, the deed of cancellation, the compensation, and its stated rationale. Strangely, the compensation paid by this entity to Blossom Farming Estates LLP surpassed its annual revenue flow.

We have summed all elements of the compensation made by DLF Residential Partners Limited in the following table.

Source: Audited FY 2019-20 financial statements of DLF Residential Partners Limited (Annexure-5.4).

Interestingly, however, the stated justification, compensation 'equivalent to increase in circle rate of said plots', falls flat as Gurugram District Administration circle-rate records reviewed by Cobrapost indicate that circle rates for premium private colonies such as DLF Phase 1 and Phase 2 remained unchanged between 2015 and 2020. This fact is in apparent conflict with a Rs. 52.45 crore 'circle-rate' payout.

As mentioned earlier, the scheme of compensation paid to Blossom Farming Estates LLP was devised in such a manner as to keep the payments below the quantitative materiality threshold. In fact, DLF Limited has a history of not making complete disclosures. For instance, around two decades back, DLF Limited launched its IPO in 2007. But it had concealed its relationship with three entities in offer documents. The shareholding of Sudipti Estates, Shalika Estates and Felicite Builders had been moved to wives of DLF employees, allegedly to ‘dissociate' some 281 associates from the issuer. After a Delhi High Court direction, SEBI barred DLF, its chairman, CFO, and five other senior officials from the securities market for three years on October 10, 2014. This was followed by a penalty of about Rs. 86 crore in February 2015. The Securities Appellate Tribunal, however, set aside the three-year market ban in March 2015. SEBI filed an appeal with the Supreme Court.

E. The GAAR Question: An 'Impermissible Avoidance Arrangement'?

Beyond company law and foreign-exchange questions, the design of these transactions invites a third lens: India's General Anti-Avoidance Rules, or GAAR, contained in Chapter X-A (Sections 95–102) of the Income-Tax Act, 1961, in force since assessment year 2018–19. GAAR empowers the tax authorities to declare any arrangement an 'impermissible avoidance arrangement' if its main purpose is to obtain a tax benefit and it bears any one of four tainted elements: (i) it creates rights or obligations not ordinarily created between persons dealing at arm's length; (ii) it results in misuse or abuse of the provisions of the Act; (iii) it lacks commercial substance; and (iv) or it is carried out in a manner not ordinarily employed for bona fide purposes. The compensation of Rs. 52.45 crore was received in the fiscal 2019–20, that is, assessment year 2020-21, squarely within GAAR's operative period.

Several features of the arrangement between Blossom Farming Estates LLP and DLF Limited meet these statutory criteria. A compensation of more than five times the deposit, paid on MOUs that never progressed to a sale deed or possession, does not resemble rights 'ordinarily created between persons dealing at arm's length' as underlined in Section 96. Section 97 deems an arrangement to lack commercial substance where its substance differs from its form, where it involves round-trip financing or an accommodating party, or where it does not significantly affect the business risks or net cash flows of the parties apart from the tax benefit. The one-event turnover of Blossom Farming Estates LLP, the deposits funded entirely by family money, and the splitting of payment across six group entities run contrary to these criteria. The 'professional fees' label attached to a real estate compensation raises, in addition, the question of a 'manner not ordinarily employed for bona fide purposes'.

An investigation by tax authorities into these transactions is warranted under GAAR.

Conclusions: The foreign currency transactions appear to violate certain provisions of the Foreign Exchange Management Act (FEMA). A non-resident is expressly barred from investing in any entity that is engaged in agriculture. As the Chaurasia's entity's name suggests, Blossom Farming Estates LLP cannot be a vehicle for investment by a non-resident under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. These transactions fall under the category of related-party transaction and appear to violate Section 188 of the Companies Act, 2013 and Ind AS 24 of the Indian Accounting Standards. The manner in which DLF Limited paid the Chaurasia farming LLP an unjustifiable compensation of Rs. 52.45 crore through its entities and then wiped them out of existence needs to be investigated for violation of SEBI's LODR Regulations and the Companies Act 2013.

Before making our findings public, Cobrapost sent detailed questionnaires to Ayushi Chaurasia, through compliance officer, Blossom Farming Estates LLP, and DLF Limited. But none of them responded.

Cobrapost Team

Disclaimer:

This story is based on regulatory filings, including annual reports, and other relevant records published by the Ministry of Corporate Affairs and the entities involved. Every effort has been made, in good faith, to be complete and meticulous in extracting, collating, interpreting, and verifying the said information in the interests of our readers and the public. Despite best efforts, if any inadvertent and unintentional errors remain, we request you to contact us on contact@cobrapost.com to enable us to rectify them immediately.