Wipro gets I-T scrutiny notice

The country's third-largest software exporter Wipro today said it has got a scrutiny notice from the Income Tax (I-T) Department for the assessment year 2008-09.

"As a part of regular assessment proceedings for assessment year 2008-09, we have received a notice from the Tax Officer seeking details," the company said in a statement.

Though Wipro did not provide details of the notice, it said the company is subject to scrutiny assessment proceedings "every year".

"We are confident that we would be able to clarify by furnishing appropriate information, as we have done in the past years," Wipro said.

Earlier this year, Wipro's rival Infosys was too had received a I-T notice demanding about Rs 450 crore in tax for wrongfully claiming tax exemption on onshore services by declaring them as software exports.

Onshore software development is the practice wherein Indian companies send their software engineers on short assignments (3-6 months) to companies based in Europe, the US, and other nations.

The government had contended revenue from software development activity and technical manpower deputed abroad are not considered as export income eligible for deduction under 10A/10B/10AA of the Income-Tax Act, 1961.

The government had said that Infosys had claimed the revenues generated from onshore software development activities and deputation of technical manpower abroad as related to business activities conducted out of its Software Technology Park and Special Economic Zone units in India as eligible for income-tax deduction.

Infosys, Wipro and many other software export firms claimed tax benefits for software export income under Section 10A of the Income Tax Act. The scheme ended in March this year.