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2007 (10) TMI 627 - AT - Income TaxLiable to deduct TDS u/s 195 ? - Payments made to foreign companies - down linking (bandwidth) charges - assessee did not make any TDS on the ground that payments are not covered under the direct provisions of sec.5 or any deeming provisions of section 9 - CIT (A) granted relief to the assessee - HELD THAT:- In our view, this issue is squarely covered by the decision of this Tribunal in the case of the assessee for assessment years 1997-98 and 2001-02. Applying the same, we confirm the orders of the learned CIT(A). Disallowance of subscription payments u/s 40A(1) - such payment fall u/s 195 - AO held that by means of this payment, the assessee has got the benefit of technical consultation and therefore the payments fall within the ambit of section 195 of the IT Act - CIT(A) granted relief to the assessee - HELD THAT:- In our view, this issue is also squarely covered by the decision of this Tribunal in the case of the assessee fog assessment years 2001-02 to 2003-04 held that; ''Annual subscription was an access fee to Gartner database maintained outside India. Fee was payable even if no service was utilized. It was like a gate pass or entry fee and could not be treated as imparting of information. The payment was for obtaining data and use in the way assessee wanted it to be used. It was for use of a copyrighted article and not for transfer of right in the copyright in the article. Just as a book it is a copyright article. Purchase of the book allows use of information contained therein but does not transfer of the copyright therein. Even if the payment for use of any copyright is covered the copyright should be of a literary, artistic or scientific work and no other. '' Applying the same, we confirm the order of the learned CIT (A) . It is ordered accordingly. Deduction u/s 80HHE - Exchange variation gain in EEFC Account - assessee did not exclude expenditure in foreign currency both from export turnover as well as total turnover - HELD THAT:- This issue is also covered by the decision of this Tribunal in the case of the assessee for assessment year 1998-99 held that; ''Though it is worded as foreign exchange currency fluctuation, it is nothing but part of export turnover and a sort of additional sale price. Thus, the same is profit of the eligible undertaking for claiming deduction u/s 10B. Similarly, it cannot be treated as other receipts for excluding 90 per cent of the same u/s 80HHE. We accordingly hold that such sum being foreign exchange gain is not to be excluded while computing profit eligible for deduction u/s 10B as well as for computing profits of the business for the purpose of computing deduction u/s 80HHE. '' Therefore, applying the same, we confirm the order of the learned CIT (A). In the result, the revenue’s appeals are dismissed and the assessee’s appeals are allowed.
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