I-T Dept seeks clarification from Cognizant on share buyback in 2013

The allegation is that Cognizant India has bought back almost 0.91 mn shares from Cognizant Mauritius for around Rs 23,000 per share

The income tax department has issued notices to the information technology services major Cognizant Technology Solutions Corporation and the group's arm in Mauritius for allegedly diverting accumulated profits from its Indian company without paying tax.

The money was diverted through an overvalued share buyback by the Indian subsidiary in 2013 and a scheme of arrangement by the US firm in 2016, alleges the tax department.

The department issued draft assessment orders in December to the two entities for the assessment year 2014-15, asking them to file objections before a resolution panel within 30 days.

A Cognizant spokesperson said, “Cognizant is