Wipro faces Rs 816 crore claim by Income Tax department

IT major Wipro faces Rs 816 crore claim by Income Tax department.

Recently, IT/ITeS companies such as Infosys, WNS and iGate have also received notices from the IT department.

India’s third largest software firm said the draft assessment order from tax authorities for 2008-09 fiscal has arisen primarily due to denial of deduction under section 10A of the Income Tax Act, 1961, in respect of profit earned by its undertaking in the Software Technology Park (STP) at Bangalore.

In March 2013, the Bangalore-headquartered company received the draft assessment order, on similar grounds as that of earlier years, with a demand of Rs 816.4 crore (including interest of Rs 84.8 crore) for the financial year ended March 31, 2009.

“The company will file its objections against the said demand before the Dispute Resolution Panel, within the time limit prescribed under the statute,” said Wipro in a recent filing to the US Securities and Exchange Commission (SEC).

When contacted by PTI, Wipro in a statement said: “No demand has been received and the assessment process is in progress.”

Besides the fresh assessment order, Wipro is also facing tax demands of around Rs 3,936 crore (including interest) for the period March 31, 2001 to March 31, 2008 due to denial of deduction under section 10A of the Income Tax Act, 1961, on profits it earned in STP in Bangalore.

Considering the facts and nature of disallowance and the order of the appellate authority upholding the claims of the company for earlier years, Wipro believes that the final outcome of the above disputes should be in favor of the company and there should not be any material impact on the consolidated financial statements.

Wipro stated that the resolution of these legal proceedings is not likely to have a material and adverse effect on the results of operations or the financial position of the company.

According to Wipro’ filing with the SEC, the appeals filed against the said demand before the Appellate authorities have been allowed in favor of the company by the second appellate authority for the years up to March 31, 2007.

Income Tax Department has filed appeals before the High Court.

For the year ended March 31, 2008, based on DRP directions confirming the position of the assessing officer, the final assessment order was passed by the assessing officer. The company has filed an appeal against the said order before the Appellate Tribunal.

[email protected]



Related News

Latest News

Latest News