News shortcuts: From the Courts | Top Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | Professional Updates | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax | PPE Safety Kit SITRA Approved | PPE Safety Kit
General »
 Can buying shares in a rights issue leave you in a tax mess?
 Income tax scrutiny down in AY18; Delhi faced the highest, Bihar the least
 Delhi govt warns strict action against companies defaulting on tax payments
 Tax burden on salaried individuals, professionals to increase Delhi
 IT department randomly picks up cases to remove bias from tax scrutiny
 TDS on cash withdrawal alert! New functionality from Income Tax Department for banks and post offices
 Income tax department notifies exemption for sovereign wealth funds
 How much gold can you keep at home as per income tax rules?
 New income tax slab: Rules changed, no exemption on meal vouchers & coupons
 Pharma shines in advance tax pay
 SDMC starts offline facility for depositing property tax

I-T dept gains with fatter tax collection
January, 09th 2009

Guess what? The only guys to have gained from Ramalinga Raju's fudged accounts seems to be the Income-Tax department.

Each time Satyam would have declared an 'inflated' income, this would have automatically led to an inflated profit figure as well. The irony is thecompany would then have to fork out real money as tax on this fictitious profit. And, as the company kept pumping up the numbers each year, the tax outgo also would have increased substantially. Satyam Computer Services, on a standalone basis, has disclosed a tax outgo of over Rs 800 crore since the financial year 2002-03, up to 2007-08.

Since 2004, the total income tax paid by Satyam on a consolidated basis stands at $169 million. Raju's letter talks about the gap in balance sheet that has arisen purely on account of inflated profits over a period of several years.

A source in the I-T department insisted that the department may not even consider returning whatever extra tax that may have accrued as a result of the fudging of accounts.

There may have been many cases wherein an individual or company would have understated income figures.

Given the magnitude of this case, the source added that it could surely be termed as a first of its kind from the I-T perspective.

As per Raju's own admission, Satyam's balance sheet as on September 30, 2008, carries an inflated (non existent) cash and bank balances of Rs 5,040 crore (as against 5,361 crore reflected in the books). It also carries a non-existent accrued interest of Rs 376 crore.

"There's been a serious lapse. The auditors should have scrutinised bank account documents. It cannot be a mere oversight. As for the income tax,which has already been filed with the department over the years, there is less chance of the department returning it," said the source, on conditionof anonymity.

Home | About Us | Terms and Conditions | Contact Us | PPE Kit SITRA Approved | PPE Safety Kit
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting