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2013 (7) TMI 163 - AT - Income TaxSoftware maintenance service - whether eligible for deduction u/s. 80IB though the transaction is in the nature of trading activity and not manufacturing activity - CIT(A) allowed the claim - Held that:- CIT (A) has rightly held that sale of software need to be taken for the purpose of deduction under section 80IB whereas service charges are not to be taken for the purpose of deduction under section 80IB. No infirmity in the Order of the CIT (A) as the sale of software consists of sales which are effected of the articles produced by the industrial undertaking and are derived from the industrial undertaking and are first degree source and therefore, eligible for the purpose of deduction under section 80IB as per the decision of the Liberty India [2009 (8) TMI 63 - SUPREME COURT]. In the case of service charges as decided in Unicorn Appliances Ltd. vs. CIT [2009 (1) TMI 764 - ITAT MUMBAI] has held that receipts by way of service charges is classified as other income which cannot be held as income derived from the industrial undertaking. Thus service charges are not profits derived from the industrial undertaking and therefore, receipts on account of service charges to be excluded while computing the profit eligible for deduction under section 80IB - Decided against the revenue.
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