No tax on fictitious income: HC rules in favour of Tech M

In a significant relief for Tech Mahindra, the Telangana High Court on Friday directed the Income Tax department to requantify the company's income based on revised financial statements, which exclude fictitious income reported as part of the infamous "Satyam scam."

- T.G. Naidu @ Hyderabad

A bench of Justices P Sam Koshy and N Tukaramji delivered the landmark judgment—allowing the writ petitions filed by the IT major, seeking a fresh assessment of income for the assessment years 2002-03 to 2008-09—after a prolonged 14-year hearing.

The case stems from Tech Mahindra's acquisition of the scam-hit Satyam Computer Services Ltd in 2009, following the disclosure by former chairman and managing director Ramalinga Raju that Satyam's accounts had been fraudulently inflated.

Raju had inflated the company's revenue with fake numbers and stated in his resignation letter that he was "riding on a tiger," saying, "I don't know how to get off without it devouring me."