Wednesday, March 30, 2011

Pay up 350 cr in a week: HC to MSAT ,Defreezing Of A/c After That; Court Restrains Co From Approaching CBDT

Hyderabad: The Andhra Pradesh High Court on Wednesday directed Mahindra Satyam (MSAT) to pay Rs 350 crore to the income-tax department within a week and furnish an unconditional bank guarantee for another Rs 267 crore.
The court directive came in the course of the hearing of the case pertaining to the tax demand of Rs 617 crore from the company as income-tax on the grounds that the same was reflected in the company’s records. The court also restrained Mahindra Satyam from approaching the Central Board of Direct Taxes (CBDT) on the matter before it heard the matter completely. Mahindra Satyam has been arguing that these incomes were fictitious and as a result of inflation of revenues by the jailed Ramalinga Raju.
The court said that the prohibitory orders (garnishing orders) they clamped on Mahindra’s bank accounts (in plain language: freezing of the company’s bank accounts) will be removed only when tax is paid. An amount of Rs 1,300 crore has been lying frozen for the last 10 days on account of the prohibitory orders.
The tax bench of the high court comprising Justice VVS Rao and Justice Ramesh Ranganathan made this interim order while admitting a plea by Mahindra Satyam that challenged the IT wing’s actions apart from seeking a direction to the CBDT which rejected their plea to reassess the case in view of the facts of the case.
Income-tax counsel JV Prasad told the Bench that the trial in the Satyam scam case is still going on and matters have still not reached the conclusive stage. “We do not know whether Raju had siphoned off the real money or had shown the non-existent money on records or whether it was a mix of both. Mahindra bought the country’s top IT firm at a cheap cost. Moreover, since the assessment orders were made final, even the CBDT will have little jurisdiction to order the reassessments of orders that reached finality long back,” he said.
But Mahindra Satyam’s counsel argued that the CBI and the department of company affairs had categorically stated that the revenues of the company were fictitious but CBDT was saying otherwise.

No comments:

Post a Comment