Hyderabad, March 22
The multi-crore accounting fraud in Satyam Computers, perpetrated by its founder Chairman B Ramalinga Raju, has created a problem for its re-branded entity Mahindra Satyam with the Income Tax Department slapping a notice for payment of Rs 616.53 crore tax on the company.

The tax arrears pertain to the period from 2003-04 to 2008-09, during which Raju resorted to massive fudging of accounts and siphoned funds from the company to his personal accounts. While Raju and his accomplices are cooling their heels in Chanchalguda jail in Hyderabad, the born-again company is grappling with the claim from the I-T Department.

The I-T Company has moved the Andhra Pradesh High Court challenging the notice sent by the Central Board of Direct Taxes (CBDT). “The Company filed a writ petition before the High Court, challenging the said impugned order and seeking stay of further proceedings,’” the company said in its filing before the Bombay Stock Exchange today.

The notice, under Section 226(3) of the Income Tax Act, has been issued by the Additional Commissioner of Income Tax, Hyderabad.

Earlier, the CBDT, under Section 119 of the Income Tax Act, rejected various petitions filed by the company seeking relief for reopening of past assessments between 2003-04 and 2008-09, determining the actual income based on the findings of investigating agencies and granting a stay on recovery proceedings for the said assessment years.

“The basis of Rs 616 crore tax is a fictitious income shown by Ramalinga Raju as a Chairperson of Satyam during his tenure. Our belief is that fraud cannot be a basis for the income tax assessment,” said Vineet Nayyar, Chairman of Mahindra Satyam.

“The reasons cited by Income Tax Department are that once you have made a declaration of income, then that cannot be changed. It is unreasonable especially when the government is prosecuting Raju and seeking severe penalties against him for creating this fraud,” he contended.

Once ranked as India’s fourth largest software company, Satyam had plunged into a crisis after Raju confessed in January 2009 to overstating profits and creating fictitious cash. Subsequently, Tech Mahindra Ltd bought a majority stake in the company through an auction in April 2009 and later rebranded it as Mahindra Satyam. 

New Delhi, March 22
With several acquisitions under its belt, Dell Inc is focusing on solutions in areas such as retail, finance, banking, healthcare, and education, Michael Dell, Founder & CEO, Dell Inc, said here today.

At a FICCI-Dell interactive meeting, Dell said: “India today offers a fantastic opportunity to use technology for a wide range of applications. We see a tremendous opportunity for growth of the PC segment in this country as the penetration level hovers around just 20-30 PCs per 1,000 people.”

Dell added the company was approaching $2 billion in annual revenue in India. “$2 billion is the milestone that our India team is now working on,” Dell Chief Executive Officer Michael Dell told reporters here at a FICCI event.

In India, the company has adopted three focus areas, namely, growing its India presence in the hardware business; entering into education and healthcare segment for the production of customised products and services and lastly, managing and servicing offerings sold in India.

Sam Pitroda, adviser to the Prime Minister on public information infrastructure and innovation said that India is starting to build four IT data centres at Pune, Hyderabad, Bhubaneswar and Delhi. The government has also agreed to set up a data centre in each state capital, he said.

Innovation, he said, held the key to India’s ability to compete and solve problems for people at the bottom of the pyramid. The government has set up a National Innovation Council. “We have decided to request the State Chief Ministers to create state-level innovation councils and are asking Central Ministries to constitute sectoral industry-related innovation councils,” Pitroda said.

New Delhi, March 22
An empowered group of ministers (EGoM) on food today finally decided to allow sugar exports of up to five lakh tonnes as production this year is expected to exceed the domestic demand.

The EGoM, headed by Finance Minister Pranab Mukherjee, decided to allow normal sugar exports not exceeding five lakh tonnes, officials said.

The Food Ministry had allowed and notified five lakh tonnes of export under Open General Licence (OGL) in December but the decision was kept on hold in view of high inflation and referred to the EGoM.

New Delhi, March 22
The government today introduced a Constitution Amendment Bill in the Lok Sabha to facilitate implementation of the Goods and Service Tax (GST), an indirect tax regime that would subsume levies like excise, service tax and sales tax.

The Bill, introduced by Finance Minister Pranab Mukherjee seeks to amend the constitution with a view to confer simultaneous powers on centre and states to levy taxes on goods and services.

“The GST would replace a number of indirect taxes presently being levied by the central government and the state governments and is intended to remove cascading of taxes and provide a common national market for goods and services", said the statement of objects and reasons of the Bill.

The Bill provides for creation of a GST Council to be headed by Union Finance Minister. — PTI

New Delhi, March 22
Garment makers and retailers, who have been demanding rollback of 10 per cent excise imposed on branded apparels, were today left disappointed by a partial tax concession given by Finance Minister Pranab Mukherjee.

“Very disappointing,” Clothing Manufacturers Association of India (CMAI) President Rahul Mehta said, while reacting to the announcement made by the Finance Minister to reduce excise duty on readymade garments and other textiles articles from 60 per cent of the retail price to 45 per cent.

CMAI, which had gone on strike earlier this month against the proposals made in Budget 2011-12, especially demanding the rollback of 10 per cent excise duty on branded apparels, said Mukherjee's move failed to address the bigger issues.

“Since it has only tinkered with the rates and not addressed our major concerns particularly that of spiralling costs of raw materials and futility of introducing a new tax one year before GST rolls out,” Mehta said.

Echoing similar sentiments, Future Group Director and CEO (Retail) Rakesh Biyani said: "The industry is largely disappointed by the minimal concession, which only addresses the margin and discount structure of the garment industry." Biyani said the incidence of tax that will have to be passed on to consumers, will continue to be high, even after the concession offered.

To protest the imposition of 10 per cent excise duty on branded apparels, around 10,000 retail stores, including Shoppers Stop, Pantaloons, Westside, Lifestyle, Madura Garments and Arvind Brands had also observed one day of 'shutter down' on March 7.

"The finance ministry should re-consider the appeal of the garment industry to continue with the optional scheme of zero excise duty when no Cenvat Credit is claimed alternately garments should be considered as "products" in transition & a nominal excise duty of one per cent should be charged," Biyani added.— PTI

Shimla, March 21
The State Electronics Development Corporation is likely to earn a net profit between Rs 55 lakh and Rs 60 lakh this fiscal. The annual turnover of the corporation has registered a significant increase.

Stating this while presiding over the meeting of the Board of Directors of the corporation Chief Minister Prem Kumar Dhumal said the corporation was rendering valuable services in spreading information technology literacy in the state. It was also providing quality computer hardware at reasonable prices to both the government and the private users.

The turnover of the corporation increased from Rs 30.96 crore 2007-08 to Rs 34.28 crore in 2009-10. The sales would touch Rs 37.26 crore this fiscal.

Dhumal added the corporation came out of the red in the year 2008-09 when it earned a profit of Rs 22.99 lakh, which rose to Rs 20.56 lakh the following year. The corporation provided computer hardware to 320 schools under Sarv Shiksha Abhiyan , 1,185 gram panchayats and various departments. It also compiled the JBT results besides examinations conducted by various departments of the state.

Dhumal said the commercial activities of the corporation could be enhanced by undertaking installation of mobile towers in different places.

He said efforts would be made to set up a call centre in the state so that local youth were trained and provided with employment opportunities. He said the sector had a huge potential for employment and self-employment.

New Delhi, March 22
In a big step towards banking reforms, the government today introduced a Bill in the Lok Sabha seeking to give voting rights to investors commensurate with their shareholding in the private sector banks.

Voting rights of investors in nationalised banks have been increased to 10 per cent from 1 per cent at present in the Bill, a step which is expected to make investments in nationalised banks more attractive.

The Banking Laws (Amendment) Bill 2011 introduced by Finance Minister Pranab Mukherjee meets the long-pending demands of investors, both domestic and global.

The draft legislation, which brings amendments in three related laws relating to the banking sector, also gives powers to the Reserve Bank of India to supersede the Board of Directors of a banking company for a period of up to one year and appoint an administrator.

The nationalised banks would be allowed to decrease or increase their authorised capital beyond a ceiling of Rs 3,000 crore, but with the approval of the central government and the Reserve Bank.

On norms for mergers in the banking industry, no approval will be necessary from the Competition Commission of India, the anti-monopoly watchdog. Only RBI clearance is needed and the necessary amendments have been incorporated in the bill.

The amendment in the banking laws would help the sector be in sync with the "international best practices", the statement of Objects and Reasons to the Bill said.