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2017 (5) TMI 1223 - HC - Income TaxEligibility for deduction u/s 10AA - SEZ unit - nature of distribution fee received from Amadeus Spain - DRP observed that amount received under the Distribution Agreement was not on account of any export of software or data processing for which deduction could be claimed u/s 10A - Revenue contended that, a parallel could not be drawn between the decisions in the Assessee’s own case for AY 1996-97 and the AY under consideration because the deduction that was claimed for AY 1996-97 deduction was under Section 80HHE whereas here it is under Section 10A of the Act. Held that:- There is no merit in the above contention for the simple reason that the Revenue has not been able to show that the activity of the Assessee, which was examined then and the activity now is any different. The essence of both Section 80 HHE and Section 10A in terms of the conditions of eligibility are not very different. - Decided against the revenue. Eligibility of the Assessee to deduction under Section 10AA - The basis for the AO to deny the deduction under Section 10AA of the Act for AY 2010-11 was that a majority of the invoices were addressed to the Assessee at the addresses in Mumbai, Gurgaon etc. Very few of those invoices bore the Noida SEZ address. The AO observed that the source of the data processing export had to be unit established at SEZ area Held that:- The claim under Section 10AA of the Act was supported by a certificate of a Chartered Accountant in Form 56F. It was noticed that Article 9 read with Schedule-I of the Distribution Agreement between the Assessee (Inter Globe) and Galileo showed that Galileo was entitled to a fee based on the number of segments completed by the Assessee. ‘Segment’ was defined under Article 2 to mean a booking, either of a direct flight or consisting of various legs of journeys, which is concluded and not cancelled at any stage. The more the number of segments booked by travel agent, the higher would be the revenues of the Assessee. Therefore, it was critical for the Assessee to ensure that the bookings were converted into segments. In terms of Article 8 of the Agreement, the Assessee was required to provide any kind of technical help, support or assistance as may be required by the subscribers in connection with use of Galileo GDS server located in Denver, USA. Revenue generated on creation of segment and finalisation of PNRs required the Assessee to undertake the said data processing services from its units located in Noida SEZ. The concurrent factual findings of both the CIT (A) and the ITAT as regards the Assessee/Inter Globe fulfilling the conditions of eligibility for deduction under Section 10AA of the Act have not been shown to be perverse. - Decided in favour of assessee.
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