I-T Dept Conducts Searches at Software Firm Tulip

The Income Tax department today conducted searches at various premises of IT company Tulip Telecom for alleged evasion of taxes running into crores of rupee.

According to sources in the I-T department, searches are being conducted in at least six to seven premises in the national capital region by 40 officials.

A spokesperson of Tulip Telecom said he has "no official communication" on the incident and would not be able to comment.

Some survey operations related to the same firm were also conducted at Jammu two days ago.

Tulip Telecom is a data telecom service and IT solutions provider. According to the official website of the company, it has "revenues in excess of Rs 16,14.40 crore ($322 million) in the financial year ending 31st March 2009 and a market capitalisation in excess of Rs 2,131.50 crores ($426 million as on 31st March 2009)".

Tulip shares are listed on bourses. Its shares on BSE today closed at over Rs 954.90, a gain of over Rs 13 from its previous closing.

Tulip Telecom plans to launch value-added services, such as push mail and corporate internet services, for the corporate sector in a few months.

Source: http://www.business-standard.com

IT cos to pay tax on software purchases

BANGALORE: The Karnataka High Court has ruled that technology firms are subject to withholding tax - deduction of tax at source - when they purchase software from global vendors such as Microsoft. This would push tech firms and branded software distributors into a corner as they will be required to withhold anywhere between 10-20% of their software purchase payments in the future.

The division bench of Justice DV Shylendra Kumar and Justice Arvind Kumar pronounced the judgement on Thursday afternoon while upholding an appeal by the income tax department that tech firms were legally obliged to withhold tax on software purchases. The order is with retrospective effect.

The IT department argument was on the premise that any software purchase amounted to royalty payment for a licence to use it, and should not be deemed as a mere purchase of good that is excluded from withholding tax.

The order could impact branded software vendors such as Microsoft, their third party distributors like Sonata Software, hardware makers like Samsung and GE who bundles branded software with their products, tech firms like Infosys when they effect a licensing of software, or even the local arms of HP and IBM which could be licensing software from their parent.

This is the first court order that has gone against the taxpayer in Income Tax disputes relating to withholding tax on software purchase. In fact, the Karnataka High Court intervention came after the Income Tax Tribunal had ruled in favour of taxpayers prompting the department to go on appeal.

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Oracle Profit Rises 4 Pc in Q1, Revenues Drop 5.5 Pc

NEW YORK: Software major Oracle Corporation has reported a growth of four per cent in net income at USD 1.1 billion in the first quarter ended on August 31 this year, while it suffered a 5.5 per cent drop in revenues.

Total revenues decreased to USD 5.05 billion in first quarter 2010 fiscal from USD 5.33 billion in the same period last year, Oracle Corp said in a statement.

Analysts said the fall in revenues was due to companies slashing their expenditures and refraining from buying new softwares.

The software company's GAAP operating margins increased by 590 basis points to 34 per cent.

"By substantially improving operating margins, we were able to increase Q 1 earnings per share even though revenues decreased slightly," Oracle President Safra Catz said.

In addition, Oracle has declared a cash dividend of USD 0.05 per share of outstanding common stock to be paid to stockholders.

"Software licence updates and product support revenues grew 11 per cent to USD 3.1 billion for the quarter when adjusted for the change in the US dollar since last year,

"This growth, coupled with our disciplined expense management, was key to our ability to generate a record USD 8.5 billion in free cash flow over the last twelve months," Oracle Executive Vice President and CFO, Jeff Epstein said.

Source:http://economictimes.indiatimes.com/

Software Exports to Grow In Double Digits

Chandigarh: India is expected to clock double-digit growth in the software and IT enabled services (ITeS) exports next year as the U.S. and other markets are recovering from the meltdown, a top official of the trade association NASSCOM said here Thursday.

"We are expecting IT exports to grow in double digits as the software markets of the US and other countries are recovering well. These markets became sluggish due to the financial meltdown but now things have started improving," NASSCOM chairman Pramod Bhasin told reporters.

He was speaking on the sidelines of 'e-Revolution 2009', a flagship forum of this region jointly hosted by the governments of Haryana and Punjab and the Chandigarh administration in association with NASSCOM and Software Technology Parks of India (STPI).

"In 2009-10, the Indian market has grown by merely four to seven percent and the software exports from India have been around $48 to 50 billion. Whereas in 2008-09, it increased at 16 percent and was at $46.3 billion," said Bhasin, who is also the chief executive officer of Genpact.

Emphasising on improving skill-sets the work force, Bhasin added: "At present the IT industry can employ only eight to 10 percent of the total graduates due to their lack of required skills. There is a need for an updated curriculum and industrial training to hone the entrepreneurial skills and talent of our youngsters."

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New Effort Hopes to Improve Software Security

It’s not much of a secret that a lot of software has security flaws. One reason is that there aren’t any real standards for designing secure software. In fact, the right way to secure programs is rarely discussed at all.

A new group is hoping to change that. Tech security company Fortify and security consulting firm Cigital are getting ready to release a set of best practices that tech companies and other businesses can follow to ensure that the software they develop is secure. The authors developed the model by studying the security practices at Google, Microsoft, Adobe, and other tech companies, as well as non-tech companies that write their own software like Wells Fargo, and Depository Trust & Clearing Corp.

“For most of the last decade security has taken place in secret,” says Brian Chess, chief scientist at Fortify. Even the most basic security information is usually held close to the vest for fear that bad guys could use it to compromise a system. The lack of transparency serves a purpose, but it comes at the expense of helping other companies improve the security of their software.

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Software piracy matters to local developers, too

Software piracy is often described as a victimless crime that only affects the pockets of software giants such as Microsoft and Oracle. Just don't tell that to "mentor capitalist" Joey Gurango, founder and CEO of local company Gurango Software Corp..

A former managing director of Microsoft's R&D division, Gurango says that while software piracy does bite into the profits of major software firms, it also kills smaller startups that do not have the money to protect their creations from unscrupulous business owners who want to cash in on other people's investment.

He cited the case of one five-man startup company in Manila that spent close to three years building proprietary software for public schools. He said the company was able to get several clients only to discover that its much touted new software was already being copied and used by other schools without paying a single centavo in license fees.

"Now, two of their employees want to quit. This isn't an isolated case. There are literally hundreds of people who invested their time, blood, sweat and tears into their products and are being deprived of their just rewards. These are Filipinos like us," he said at the launch of Global Anti-Piracy Day in Makati.

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Economic necessity is the mother of software reuse

Here is an assertion you are unlikely to see anywhere other than in this article: an economic recession right now would do the Web the world of good.

Wow! How could that possible be true? Lets suck all the money out of the system and see what happens? Sounds painful. Sounds suicidal. Has McGrath finally lost it?

Money is a constraint. I have written before about how important constraints are in software development. In a nutshell, constraints are the wellspring from which many good things come. Money, it could be argued, is the granddaddy of all constraints.

When money is tight in software development, what happens? Well, teams look to cut capital costs and to keep overheads as low as possible. Two good ways to keep capital costs down are to use open source software technologies and to use ISPs to rent hardware/connectivity rather than buy hardware. How are these good for the Web?

Well, the Web thrives in large part because of the quality of open source and the fact that low cost software makes horizontal scaling economically viable. The more developers who are developing on these open components the better for the openness of the Web as a whole. Also, the more developers utilize the Web itself to develop for the Web - the stronger the Web ecosystem becomes. Web based source code control systems. Web based issue trackers...

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Opening up BT networks 'central to development'

BT's decision to open up its network to customers looking to develop their own services represents the next stage of progression in the telecoms industry according to Andy Green, the executive leading a major reorganisation of the former monopoly's internal structure. His task is to speed up BT's transformation into a fully-fledged IT services company.

Mr Green spent five years as chief executive of BT Global Services, the IT division which has acted as the overall group's growth engine in recent times. Under his leadership, the division grew into the third-largest IT contracting company in the world, behind US giants IBM and EDS. Yet last month, the well-regarded BT executive switched to a new role as chief executive of group strategy and operations. He also took charge of two new units – BT Design and BT Operate – focused on improving processes across the whole company.

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