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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.

 
 
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