Wipro has been slapped with an over Rs816 crore claim by I-T department, becoming the latest IT company to have got such a notice after Infosys, WNS and iGate
Azim Premji-led Wipro became the latest information technology (IT) company in India to receive a notice from the Income Tax (I-T) department. Following similar tax demand notices to Infosys, WNS and iGate, the I-T department has slapped a notice for Rs816 crore on Wipro.
In a statement, Wipro, the third largest IT company in the country, said, the 'draft assessment order' from I-T authorities for FY2008-09 has arisen mainly due to denial of deduction under section 10A of the I-T Act, 1961, in respect of profit earned by its undertaking in the Software Technology Park (STP) at Bangalore.
In a regulatory filing on the US Securities and Exchange Commission (SEC), Wipro said, “The company will file its objections against the said demand before the Dispute Resolution Panel, within the time limit prescribed under the statute”.
Besides the fresh assessment order, Wipro said it is also facing tax demands of around Rs3,936 crore (including interest) for the period 31 March 2001 to 31 March 2008 due to denial of deduction under section 10A of the I-T 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, the company believes that the final outcome of the above disputes should be in favour of the company and there should not be any material impact on the consolidated financial statements,” the Wipro filing added.
The bounce, if any, will only be temporary
In line with all the Asian indices, the benchmarks back home too ended in the red. The Sensex, which opened 144 points lower at 18,897 ended in the negative for the third consecutive trading day while the Nifty, which opened 51 points lower at 5,709 ended in the negative for the sixth consecutive trading day. The NSE saw a volume of 56.64 crore shares.
In the morning session itself the indices hit their respective low, which was the lowest after 18 April 2013. Sensex hit a low of 18,766 while the Nifty hit a low of 5,683. From the lows, the benchmark tried recovering but ended in the negative. The Sensex closed 18,827 (down 214 points, 1.12%), while the Nifty closed at 5,699 (61 points down, 1.06%).
Among other news, the World Bank cut its global growth forecast. The world economy will expand 2.2%, less than a January forecast for 2.4% growth and slower than last year's 2.3%, the bank said in a report. It lowered its prediction for developing economies and sees the euro region's gross domestic product shrinking 0.6%. In contrast, forecasts were raised for the US and Japan, which were helped by fiscal and monetary stimulus.
Finance minister P Chidambaram speaking on the state of the economy today said he expects decisions to be announced in June that will accelerate economic reforms and spur investments in critical sectors and that steps government had taken in the last nine months have yielded results.
The government is also looking to pass a measure allowing cash-strapped power utilities to pass on the higher rising cost of imported coal to customers.
The Securities and Exchange Board of India (SEBI) raised the investment limits for foreign investors in government debt by $5 billion to $30 billion, but only long-term funds will be able to buy into that increased limit.
US stocks fell on Wednesday as traders extended a selloff driven by concern about central banks winding down their stimulus measures. The Federal Open Market Committee meets next week after the Bank of Japan this week left its debt-buying programme unchanged.
With the all the Asian indices ending in the red, Nikkei 225 fell by 6.35%. The European indices were trading in the red and so were the US Futures.
In just 24 hours, the Ministry of Statistics and Programme Implementation has revised the IIP data for April to 2.2% from 2% disclosed yesterday
The union government has revised the industrial output growth rate to 2.2% in April from 2% that was released on Wednesday following a correction in the recording of production data for electricity.
In a statement, the Ministry of Statistics and Programme Implementation said, "“The General Index (of industrial production) for April 2013 is revised upward to 167.8 from 167.3 shown in the press release (issued yesterday). The revised index is 2.2%, higher as compared to the level in the month of April 2012".
“Due to wrong recording of production data for the electricity sector, the Index of Industrial Production (IIP) for the electricity sector for April 2013 is corrected to 159.1 from 153.8 as shown in the press release issued on 12 June 2013 of this Ministry,” the statment said.
The factory output measured in terms of the Index of industrial production (IIP) had seen a contraction of 1.3% in April last year.
According to the Ministry statement, the indices of industrial production for the mining, manufacturing and electricity sectors for the month of April 2013 now stand at 121.0, 177.8 and 159.1 respectively, with the corresponding growth rates of (—) 3.0%, 2.8% and 3.4% as compared to April 2012.
The Ministry has also revised the growth rate in the output of basic goods to 2% from 1.3% released yesterday.