TMI Blog2004 (8) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that what has been exported by the appellant company is also tangible, in the sense that same has been marketed as a product by information vendors all over the world. ADDITIONAL GROUND The Income Tax Officer, Refunds-XIV, Mumbai and the CIT(A) XXXI, Mumbai ought to have given deduction under section 80HHE of the Act in respect of sum of Rs. 24,09,818 being the profit of the appellant from export out of India of computer software as defined in clause ( b ) of explanation to section 80HHE of the Act or its transmission from India to places outside India." 2. The assessee is a data vending company. It claimed deduction under section 80HHC and alternatively under section 80-O. The Assessing Officer rejected the claim for deduction under section 80HHC. Vide the impugned order dated 29-9-1999, the learned CIT(A) held that the assessee is engaged in the business of export which does not fall either in the meaning of "Goods" or "merchandise". It was, therefore, held that the assessee would not be entitled to claim deduction under section 80HHC ( sic ) : 3. Before us, the learned counsel for the assessee has submitted that the assessee is a data service provider - a data v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey receive data from all the said sources, of which, the data of MIS is a part, for relevant financial instruments which they cover. Each MIS client has several analytical tools, features, facilities to extract available in their systems. Its clients can use these facilities to extract useable information from the sea of data available on MIS system. MIS gets a lot of data/raw material which it segregates for preprocess, captures (production), converts/packaging and transmits (transportation) to its clients. Like any production activity, there is wastage since not all the data contained in all the documents received by MIS is used. The data in the central database (production) has got no resemblance to the original documents from which the data was captured nor can the original document be recreated from this data. MIS receives the documents every day. Trained staff segregate various documents and capture the data. They scan these documents and decide what, how and where the data required by MIS should be entered into the central database. This entry is done through a programme designed to check for errors, maintain the integrity of data, allow for cross checking and ease the data ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s database. At that meeting Janak also gives the potential customer the shopping list of the information Malhar can offer from its database. Therefore, Janak and the potential customer communicate via telephone and/or fax and/or e-mail on issues pertaining to the requirements of the customers, items offered by Malhar, crystallising and firming the information/data to be supplied by Malhar, methodology of delivery data and the nature of the format. In majority of the cases the format is given by Malhar and the client on the basis of his requirement and the systems in his office for receiving the data and delivery to the user department in the client s organisation and to this client, suggests changes in the format. Malhar at its sole discretion may or may not accept the suggested changes. Thereafter the final format is decided. Even at the cost of repetition it is submitted that format is nothing but the specifications which enables the flow of information from Malhar s database to the client s database" 6. The learned counsel for the assessee has submitted that in view of the aforesaid factual position, the assessee is entitled to claim for deduction under section 80HHC. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levision are movable property within the meaning of the Sale of Goods Act. It was held, considering the case under the Copyrights Act, 1957, that the signals transmitted can also be transmitted, stored, delivered and possessed. Many of the programmes are being stored and they can be possessed. It has all the attributes of the movable property. Therefore, it was held that signals are movable property within the meaning of the Sale of Goods Act. The learned DR has submitted that since in Abdulgafar Nadiadwala s case ( supra ), a physical shifting of beta-cam-tape, was involved, the facts therein are different from those of the assessee s case. In the present case, there is no such physical shifting, transfer, etc. Therefore, the assessee is not entitled to deduction under section 80HHC. However, the department has missed the ratio of Abdulgafar Nadiadwala s case ( supra ). That there was a physical shifting of beta-cam-tape is merely incidental to that otherwise allowable claim of deduction under section 80HHC. It has been effectively held that the transaction whereby the assessee has purchased the rights of various decoders and had recorded on beta-cam-tapes and entered into an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant giving information or knowledge should have authorship thereof. The said requirement is contrary to law and facts. In any event under the Copyright Act the appellant had the proprietary right cover the data transmitted and knowledge given. 2. The appellant submits that its claim for deduction of Rs. 12,16,592 being 50 per cent of amount received for vending data and supplying information/knowledge abroad is in accordance with section 80-O of the Act and fully satisfies all the conditions required thereafter." 14. In this appeal, the assessee claimed deduction under section 80HHC and alternative deduction under section 80-O. Vide assessment order dated 30-3-1999, deduction under section 80-O was granted. Vide order dated 19-3-2001, exercising the jurisdiction under section 263 of the Act, the learned CIT held that the assessee was not even entitled to deduction under section 80-O. The present appeal arises from the said order. 15. However, since the main claim of the assessee for deduction under section 80HHC has been allowed by us while dealing with ITA No. 5689/M/99 ( supra ), the present appeal does not survive and is rejected as such. 16. Resultantly, Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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