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US-based Ciena has received a tax notice from the I-T department, a claim the telecom equipment firm has contested.
"During February 2014, Ciena received a final audit assessment notice from the India tax authorities...Ciena has filed an appeal citing deficiencies in this assessment.
"Although Ciena estimates that it could be exposed to possible losses of up to $2.9 million, it has not accrued a liability of such amount as of April 30, 2014," Ciena said in its latest regulatory filing.
Ciena did not respond to email query on the final tax demand raised by the I-T department.
The company, as of October 31, 2013 and April 30, 2014, Ciena, had accrued liabilities of $0.4 million related to an preliminary assessment notice from the Indian tax authorities citing deficiencies in payments for the assessment year 2009 related to income taxes, the filing said.
Ciena has filed an appeal, it added.
India is one of the key markets for Ciena where it is looking to increase its market share in telecom equipment segment.
The company has six research and development centres including in India. Lease of its R&D centre in Gurgaon and Canada is due to expire in 2017.
Ciena said the transition of these facilities can affect a large number of employees at these centres.
"We have recently undertaken and expect to undertake in the future a number of significant facilities transitions affecting a number of our largest employee populations...We are currently considering facilities and development alternatives in advance of the expiration of these leases," Ciena said.
