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2015 (3) TMI 930 - AT - Income TaxExemption under section 10B - disallowance of claim by CIT(A) concluding that supplying of computer software solution to various shipping companies is not export income from sale of such softwares - Held that:- Software is generally developed by the software company and then the same is sold to various customers. The normal procedure for such sale is through a licence agreement by which the customer get to use the software. But the source code is normally not provided because that will enable the customer to make any number of copies and the developer would lose the premium which it can receive by selling it to various customers. We are of the opinion that example of selling of a book would clarify the situation. Whenever a person buys a book, he gets the right to read but he does not get the copyright to produce the copies or any content of such books which does not mean that the books seller has not sold the books or customers has not purchased the books. Similarly it can be said about the usage of law journals which are being sold or purchased on licence basis. From the case of Tata Consultancy Services v. State of Andhra Pradesh [2004 (11) TMI 11 - Supreme Court] it is clear that transfer of right to use the software in media form, i.e., in the form of compact disc, etc., was held to be sale of goods. Thus even the usage of the rights in a product would amount to export, therefore, in our opinion when the assessee has developed and sold the software on licence basis, the same would amount to sale for the purpose of deduction under section 10B, accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) and direct the Assessing Officer to allow the deduction under section 10B of the Act. - Decided in favour of assessee. Benefit of exemption under section 10B - CIT(A) allowed the claim as the company is doing data entry work as per agreement and does not fulfil the condition laid down under section 10B? - Held that:- As relying on case of Bebo Technologies P. Ltd. [2011 (4) TMI 870 - ITAT, Chandigarh ] wherein objection of the Assessing Officer regarding non-availability of production data has no merit as the assessee is carrying out back office operations for its clients which is a project of service industry for which production data is not required - Further, finding of the Assessing Officer that there was restructuring of business already in existence as the assessee was found to be operating from three different places and no new computers were purchased by the asses see for carrying on its business is also not correct - Assessee was carrying on its business in two units at Chandigarh while its registered office is located in Mohali where no business activity was carried out-There was no restructuring of business-assessee has carried out its work on loaned equipments and evidence in this regard has been considered by Commissioner of Income-tax (Appeals)-There is no merit in the observation of the Assessing Officer that non-mentioning of the location from where invoices were issued disentitled the assessee to the claim of exemption under section 10B-There is no requirement to furnish the addresses of the individual places from where services were rendered as against mention of registered office on the invoices-Assessee has furnished the registration under the STPI as a 100 per cent. export-oriented unit. Therefore, the assessee is entitled to deduction under section 10B - Decided in favour of assessee.
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