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Mahindra Satyam receives Rs 2114 crore I-T Department notice

23 Aug 2011 Evaluate

The Income Tax Department has slapped a tax demand of Rs 2114 crore on IT firm Mahindra Satyam (erstwhile Satyam Computer Services). The company acknowledged receipt of a draft of the proposed assessment orders together with draft notices of demand for Rs 1037 crore and Rs 1075 crore for 2002-03 and 2007- 08 respectively. The draft disallowed tax exemptions or deductions the company claimed.

However, it does not exclude fictitious income wrongly offered to tax by the earlier management. The existence of fictitious sales and fictitious interest has even been confirmed by other Government of India agencies.

The Company has in several writ petitions filed before the High Court of Andhra Pradesh inter-alia challenged the re-opening of the assessment for AY 2002-03 and sought directions that fresh assessments should be carried out after removing the fictitious sales and fictitious interest. These petitions are pending before the High Court.  

Under the directions of the Supreme Court, the company deposited a bank guarantee of Rs 617 crore to the Department against its notice for the same amount for questionable years early this year.

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