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2015 (7) TMI 1113 - AT - Income TaxEligibility for deduction u/s 10B - income earned by the assessee from the on site development of software through its associated enterprises under sub contract - Held that:- We have gone through the agreements as well as the work orders received by the assessee from the clients and found that the work of software development was undertaken by the assessee and risk and reward under the agreements belongs to the assessee and not to the associated enterprises of the assessee. The assessee has received the entire consideration of development of software in foreign exchange and earned profit on that part of the job executed by the associated enterprises under sub-contract after reducing the expenses incurred by the assessee. Assessee is eligible for deduction with regard to the income earned by the assessee company from the ‘onsite development of software’ carried out by the AE. It is also noteworthy to mention that the payment made by the assessee to the AE for the work done by the AE at the site of the customer has been accepted by the TPO to be at Arm’s Length Price. Therefore, there cannot be any imputation that the assessee has been trying to shift the profits out of India by outsourcing the work to the AE.- Decided in favour of the assessee.
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