IBM slapped with tax notice for under-reporting income

Press Trust of India Posted online: Saturday, Nov 02, 2013 at 0000 hrs
New Delhi : Software solutions giant IBM has been slapped with a tax notice by the income tax department for under-reporting revenue from Indian operations, a claim the company contested.

According to reports, the IT department alleged that IBM had under-reported its income for fiscal 2008-09 from an export promotion scheme.

The notice is a draft assessment order that IBM can challenge. The tax claim amount could not immediately be ascertained from the income tax department or the company.

An IBM spokesperson said: "IBM does not agree with the tax department's claims and will aggressively defend itself through the appropriate judicial process."

However, last month, IBM said in a US Securities and Exchange Commission (SEC) filing: "At September 30, 2013, the company has recorded $394 million (about Rs 2,433 crore) as prepaid income taxes in India.

"A significant portion of this balance represents cash tax deposits paid over time to protect the company's right to appeal various income tax assessments made by the Indian tax authorities. The company believes it will prevail on these matters and that this amount is not a meaningful indicator of liability."