Prestashop 1.5.4 seo urls 404 error - mod_rewrite enabled when store is in sub direct

Getting 404 error on activating seo urls if the store is in sub folder

SEO urls working fine if the shop is in root folder

Inside a sub folder /shop/store-name/ its not working - 404 errors occurred.

But there is no error in local host ( in sub directory /shop/store-name/)

Mod rewrite enabled on server. WordPress sites on this server supports “clean URLs” without any error.

Host : DreamHost
version : 1.5.4
Server : Linux shared server

There is no significant entries regarding this error in error log

Because of this I cant use prestashop web service