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2005 (7) TMI 667 - ITAT BANGALOREExemption u/s 10A - eligibility of "Eagle Software" - HELD THAT:- In the cross-objection, the assessee desires that the amount received from sale of "Eagle Software" be charged under the head 'Capital gains' and not as revenue receipts. CIT(A) while holding that the amount is eligible for exemption u/s 10A, held as under: '' We find that "Eagle Software" was designed and developed by the assessee during the course of its business in development of software. Thus, it cannot be said that assessee acquires certain capital asset. Design and development of software are part of a business activity of assessee company and hence, any amount realized on sale of such product is to be treated as trading receipt only. From the records, we find that the assessee has furnished all necessary details to show that the sale was affected through the eligible STP unit. The sale of STP unit started after 1st Sept., 1994. Thus, profit from sale of such software is eligible for deduction under s. 10A of the Act. The profit arises not at the time of manufacture but at the time when it is ultimately sold. Since the product was sold through the STP unit, the same is eligible for deduction as profit of eligible STP unit as provided u/s. 10A of the Act. We accordingly do not find any reason to arrive at a view other than that arrived by learned CIT(A).'' In the result, the appeal of assessee is partly allowed. The appeal of Revenue and the cross-objection by assessee are dismissed.
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