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2015 (10) TMI 2062 - HC - Income TaxEligibility for deduction under Section 10A - income earned by the assessee through the development of the software by the Associated Enterprise - sole ground for denying the benefit of section 10A is that 'on-site' development of computer software has not been executed by the assessee itself through its own personnel - Held that:- The entire 'on-site' work has been sub-contracted to the AE. The MSA provides for the AE to work under total supervision and control of the assessee. The software to be produced by the assessee during its 'on-site' development has to be as per the specifications given by the assessee. The AE has no concern or direct dealing with the end customer. The assessee provides all relevant information and inputs to the AE on behalf of the end customer. The AE is admittedly answerable to the assessee and not the end customer. In such nature of the work which is carried on by the AE on behalf of the assessee, it cannot be said that there is no nexus between 'off-shore' development and 'on-site' development. In view of the above we are of the opinion that in the facts of the present case, the income earned by the assessee through 'on- site' development of software by the AE on behalf of the assessee, would be eligible for deduction under Section 10A of the Act - Decided in favour of the assessee.
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