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2014 (5) TMI 548 - AT - Income TaxDisallowance of deduction u/s 10B of the Act – Held that:- The assessee after collecting raw data and pictures has utilized its expert designing skills in producing a ready to print e-book - The final product is intended for use of a particular customer and it does not fit in the category of production of “any customized electronic data” as per the definition of computer software defined in Explanation 2 to section 10B of the Act - even if it is said that the assessee has merely customized the data, which was already available and has not created altogether new software then too the appellant cannot be deprived of the benefit of deduction – the definition of "produce" is wider than the term manufacture – Relying upon CIT vs. Lovesh Jain [2011 (12) TMI 93 - DELHI HIGH COURT ] it 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' - whatever form the input data is, so long as the end product is in the form of electronic data which is customised by the appellant for the end use of a particular customer, then benefit of deduction u/s 10B of the Act cannot be denied - the final product of the assessee was in electronic form. The Assessee’s business involved export of ready to print books which in the instant case is the “customized electronic data” - The nature of activity done by the assessee in the EOU was that of producing designs, drawings, layouts and scanning for the projects of foreign clients on the basis of their parameters and specifications - This activity is done by taking into consideration the data collected by the assessee itself or from clients – the assessee is entitled to claim deduction u/s 10B of the Act - the ready to print books exported by the appellant in the form of a CD or e-mail are customised electronic data eligible for claiming benefit of deduction – Decided in favour of Assessee.
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