Mahindra Satyam shares were weak in noon trade, but off day’s lows, as the company grapples with a Rs 616-crore claim from the Income-Tax department. The company has already moved the Andhra Pradesh High Court challenging the I-T department's claim.
Some analysts tracking the stock are confident that the company may win the case against the I-T department, and do not see a major downside in the stock.
"It would not have any significant impact on the stock," said SP Tulsian from tulsian.com.
"The company has a strong case to plead for. It may emerge successful in the writ petition filed in the High Court of Andhra. Sales figures were inflated during 2003-04 to 2008-09. Hence, the question of taxing those sales revenue does not arise," Tulsian said.
The income tax department had last year served a notice to Mahindra Satyam, demanding for an audit of its accounts for the assessment years (2003-04 to 2008-09) as the company was found guilty for illegally claiming tax credit on fictitious income during the period.
Satyam, once one of the top five IT majors in the country, was hit by an accounting scam in 2009 after its founder Ramalinga Raju admitted to overstating profits for many years.
"It is not a case of tax evasion. In fact, there is nothing to read much out of this," said a senior official at a retail broking house.
"If the company manages to win the I-T case, it could trigger a significant upside in the stock. However, we are still in the wait and watch mode looking for further clarification on the case," he said.
At 1226 IST, the stock was trading at Rs 66.50, down 0.8%, after having touched Rs 65.05 earlier in the session.
Will Satyam succeed in contesting the Rs 616-crore claim by I-T
Tuesday, March 22, 2011
Yamunesh
