Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (4) TMI 738 - ITAT HYDERABADEntitlement of deduction u/s 10A of the Act - Production and development of computer software solutions – Held that:- As per the agreement, the assessee has to provide services at the place assigned by the Seavus Group and that the payment is to be made as per man-hours spent by the professionals - it is not possible to hold that the assessee has not exported any article or thing or computer software - the meaning of computer programme has been expanded as "computer program" "process" or "management of electronic data" - the product and service as notified by the Board for the purpose of clause (i) of Explanation 2 includes the contents development, data process, human resources services etc. as part of computer software eligible for exemption, if other conditions are satisfied - the human resource service in the field of development of software programme as notified falls under the definition of computer programme as stipulated in the Explanation as well as the definition u/s 10A - raising of bill on the basis of man-hour further supports the case of the assessee that the assessee is carryout the customization work of software and development of programme as per the specific requirement of clients - the method of invoice cannot be the basis of rejection of the claim of the assessee. When the assessee has been collected the customised data, stored and transmitted the same through electronic media, then this activity of the assessee falls under the definition of computer programme as provided under sec. 10A as well as under Explanation 2 of sub sec. 10A thereby the definition of software has been expended as customised electronic data or any product or service of similar nature as may be notified by the Board - The assessee definitely engaged in the export of customised electronic data as recorded by the Assessing Officer in his order. The AO has not disputed the fact that the assessee was engaged in customising the software as per the needs of the clients - the definition of “produce” is wider than the term "manufacture" and does not require to produce or manufacture altogether a new product - but if the outcome of the process is a different product than the input it would fall under the definition of ‘produce’ – thus, the customised SAP software after passing through cumbersome process of customization is different product; i.e. software, then the original standard software and would certainly fall under the term ‘produce’ – thus, the claim of the assessee u/s. 10A is to be allowed as the deduction claimed by the assessee falls under the provisions of Explanation 2 after section 10A(9A) of the Act – Decided in favour of Assessee.
|