New
Delhi: Income Tax department has slapped a fresh USD 106 million (about
Rs 582 crore) tax demand notice on Infosys, for 2009 fiscal, adding to
the tax woes of India's second largest IT firm.
The
Bangalore-based software services exporter is already contesting
additional income tax demands of
USD 214 million (about Rs 1,175 crore)
for four fiscals years beginning 2005 and said it will take legal
recourse against the fresh tax demand notice as well.
"The
company has received the assessment order from the Income tax
authorities for fiscal 2009 on May 2, 2013 along with a demand order
for an amount of USD 106 million," Infosys said in a filing to the US
Securities and Exchange Commission (SEC) last week.
In the filing
Infosys added, "As the company is contesting this position like earlier
years, the appellate authority would be approached within the time
limit prescribed under the relevant law."
Infosys is already
facing tax demands worth USD 214 million for fiscal 2005 to fiscal 2008
"mainly on account of disallowance of a portion of the deduction claimed
by the company under Section 10A of the Income Tax Act."
"The
company has received demands from the Indian IT authorities for payments
of additional taxes totalling USD 214 million, including interest of
USD 62 million upon completion of their tax review for fiscal 2005,
fiscal 2006, fiscal 2007 and fiscal 2008," it said in the filing.
The
deductible amount is determined by the ratio of
export turnover to total turnover. The disallowance arose from certain
expenses incurred in foreign currency being reduced from export
turnover, but not reduced from total turnover, it added.
The tax
demand for fiscal 2007 and fiscal 2008 also includes disallowance of
portion of profit earned outside India from the STP units and
disallowance of profits earned from SEZ units, it said.
"The
matter for fiscal 2005, fiscal 2006, fiscal 2007 and fiscal 2008 are
pending before the Commissioner of Income tax (Appeals) Bangalore,"
Infosys said in the filing.
Infosys added that its position in the cases relating to tax demands is strong and it expects to win the appeal.
"The
company is contesting the demand and the management, including its tax
advisors, believes that its position will likely be upheld in the
appellate process.
"The management believes that the ultimate outcome of this proceeding will not have a material
adverse effect on the company's financial position and results of operations," it added.
On
taxes in India, Infosys said in the filing "The company, as an Indian
resident, is required to pay taxes in India on the company's entire
global income in accordance with Section 5 of the Indian Income Tax Act,
1961, which taxes are reflected as domestic taxes."