NO RELIEF I-T slaps 2,114-crore tax demand on Mahindra Satyam

The income-tax department has slapped a tax demand of Rs 2,114 crore on IT firm Mahindra Satyam (erstwhile Satyam Computer Services), after disallowing exemptions claimed by the company. “The company has received draft notices of demand for Rs 1,037.69 crore and Rs 1,075.73 crore for assessment years 2002-03 and 2007-08, respectively,” Mahindra Satyam said in a filing to the BSE. 

    “This is only a draft assessment order. We will respond once we receive the tax notice. We may approach the Tribunal. The tax was levied on fictitious income. It is not justified. Even the government is aware that the income was fictitious during that period,” a senior official said. 
    Tech Mahindra had acquired Satyam Computer after amulti-crore accounting fraud in the company came to light in January 2009. After the acquisition, the company was rebranded as Mahindra Satyam. 
    Mahindra Satyam has been seeking return or adjustment of taxes paid on inflated income when disgraced founder Ramalinga Raju was the chairman of the IT company. The company has argued that the tax payments were made on account of alleged fudged records shown by the company. “The draft of the proposed assessment orders proposes disallowance of tax exemptions/deductions claimed by the company. However, it does not exclude fictitious income wrongly offered to tax by the earlier management,” the filing said.