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2009 (11) TMI 550 - AT - Income TaxDeduction u /s 10A – Export of Computer Software - Software Technology Parks of India has expressed its inability to certify the exports of the assessee in the absence of guidelines - actual exports out of India - assessee has shifted its operations from H.R. services to software development in the subsequent assessment year thereby the possibility of recruiting and sending further candidates abroad - many of the candidates allegedly recruited had denied having been trained or offered employment abroad – Board's circular dt. 26th Sept., 2000 - Held that: - Supreme Court in the case of UCO Bank vs. CIT (1999 -TMI - 5746 - SUPREME Court). - the Board has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under s. 119 of the Act, which are binding on the authorities - the task of interpretation of the laws is the exclusive domain of the Courts. However, the Board has the statutory power under s. 119 to tone down the rigour of the law for the benefit of the assessee by issuing circulars to ensure a proper administration of the fiscal statute and such circulars would be binding on the authorities administering the Act. Considering this ever-expanding horizon of software products and services, the Board has been given the power to notify such products and services which in its opinion should qualify for deduction under s. 10A. In other words, this power of the Board when exercised, it will ensure proper administration of the fiscal statute as observed by the Supreme Court in UCO Bank's case. It is in this sense the learned AM has observed that the Board's circular has made the job of the AO quite simple. While deciding these issues, the principle of ejusdem generis will have to be kept in mind. However, so far as services which are ITE are concerned, the assessee can take the benefit of deduction only if they are notified by the Board. If this power of notifying the services was not given to the Board, principle of ejusdem generis would have applied. Since the power is exercised under the specific provision of s. 10A, it is presupposed that the services in respect of which the assessee is claiming deduction are information technology enabled (ITE). Of course, as a matter of normal precaution taken while making an assessment, the AO will satisfy himself as to whether the customised data is in electronic form or not and whether it is electronically transmitted outside India or not. If the data of recruitment and training collected by the present assessee is in a manual form and is sent to US by post, the assessee will not be entitled to deduction under s. 10A. When undisputedly the entire data is in electronic form, the assessee is entitled to avail benefit of exemption.
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