Date:27/06/2006 URL: http://www.thehindubusinessline.com/2006/06/27/stories/2006062703760400.htm

Back Wipro appeals against Rs 286.9-cr I-T notice

Vishwanath Kulkarni

Appellate upholds deductions claimed on earlier demands

Bangalore, June 26

Wipro Ltd has filed an appeal against the latest income-tax assessment order demanding a tax of Rs 286.9 crore for 2002-03, according to Mr Suresh Senapaty, CFO.

The I-T authorities had served the order in March 2006; tax demanded included an interest of Rs 75 crore, Wipro said in its latest annual report.

The demand, under the I-T Act 1961, was primarily on account of denial of deduction under Section 10A for profits the company earned out of its software technology park units in Bangalore for 2002-03.

Software exporters are exempt from paying tax on their income under sections 10A and 10B of the I-T Act.

Wipro has already made some provisions for this contingent liability. "After considering the provision made in the books based on our assessment, as of March 31, 2006, our net exposure on these tax demands was Rs 241 crore," it said.

This is the third notice being served by the I-T authorities on Wipro Ltd in recent years.

Wipro had received demands in March 2004 and March 2005 for 2000-01 and 2001-02 respectively for a total of Rs 523.3 crore. Wipro had appealed against the demands then.

"In March 2006, the first I-T appellate authority substantially upheld the deductions claimed by us under Section 10A of the Act, which will vacate a substantial portion of the demands for these years," Wipro said in the filing.

"Further, considering the facts and nature of disallowances, the order of the appellate authority upholding our deduction claims for our 2000-01 and 2001-02 financial years, our management believes that the final outcome of the 2002-03 dispute should also be resolved in our favour and there should not be any material impact on our financial statements."