Khurshid asks Finmin not to tax Satyam's inflated income

Corporate Affairs Minister Salman Khurshid has asked the Finance Ministry not to tax Satyam Computer Services (now Mahindra Satyam) on the basis of income provided by its founder B Ramalinga Raju.

"We have written to Finance Minister Pranab Mukherjee... knowing that the income disclosed (by Satyam founder Ramalinga Raju) were not reliable, not honest, how can the department rely on it and say we don't care whether it is real income or stated income, we will tax it," Khurshid said here.

Mahindra Satyam has reportedly requested Khurshid to take up the issue of taxation with the Finance Ministry as it would be unjust to tax income that was never there.

"I think, it is a conundrum that needs to be corrected and I hope that the finance minister will have the time to look at it and consider it," the Minister said.

In January last year, Raju had admitted to fudging the company's accounts to the tune of Rs 10,000 crore and inflating profits.

The company had also paid tax on fake income on bank deposits that didn't exist.

In October last year, the Company Law Board had extended the timeline for Mahindra Satyam to finalise its accounts to June 30, 2010.

After the scam was unearthed, the government had taken over the reins of the company and later sold it to Tech Mahindra.