Wipro to appeal against I-T claim

Wipro Ltd has said that it will go on appeal against the Rs 261 crore income tax notice slapped on it. According to Suresh Senapaty, corporate executive vice president-finance, Wipro Ltd, "We believe that a bulk of that order is not sustainable. Of the Rs 261 crore about Rs 230 crore is not provided because we think it is not sustainable. The balance amount has already been provided in the accounts. We would go on an appeal against the particular order very soon. There is a timeline that is available for appealing and we will be doing that."

While responding to a query on US backlash against outsourcing, Vivek Paul, vice chairman of Wipro Ltd, said in a lighter vein, "I would say that the most significant backlash, which impacted our business, was within India. It is indeed the tax claim made by the Income Tax department."

Clearly, the notice served by the Income Tax department has not gone down well among the top management in Wipro.

While the Income Tax department has said that a company needs to show expanded businesses as new entities in order to obtain a tax holiday as per Section 10-A of the Income Tax Act, Wipro has said that it has followed all rules and regulations that existed while setting up these units.

As both parties continue to maintain their stand, there is still an ambiguity on whether Wipro has declared them as separate units.

In his response to this issue, Azim Premji, chairman, Wipro Ltd termed it as an industry issue.

"There have also been many other companies who have been served the tax notice as reported in the newspapers. These companies have also been painted in the same brush. So really its an industry issue."