TMI Blog2013 (3) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10A - whether the Approval granted by the Director of STPI was sufficient approval so as to satisfy the conditions relating to Sec 10A of? - Held that:- Central Board of Direct Taxes and an instruction (Instruction No.1/06 dated 31.3.2006) issued clarifying the position with regard to the deduction under Section 10A that the claim of deduction under Section 10A of the said Act should not be denied to the Software Technology Park units only on the ground that the approval/registration to such units had been granted by Directors of the Software Technology Parks. Also inter-ministerial communication dated 23.3.2006 issued by the Secretary, Ministry of Communications and Technologies makes it clear that the approvals issued by the Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are expenses incurred by the assessee was revenue in nature? (C) Whether Tribunal failed to appreciate that as regards the software it was a case of a sale of copyrighted article and hence the expenditure could not be treated as revenue in nature? 2. Insofar as proposed questions B and C are concerned, the learned counsel for the respondent-assessee points out that the issues are covered by the decision of this Court in CIT Vs. GE Capital Services Ltd. (2008) 300 ITR 420 (Del.).The learned counsel for the appellant agrees that the issues of software expenses stand covered by that decision of this Court. 3. The issue involved in proposed question A is whether the approval granted by the Director of the Software Parks of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that one of the conditions is that the respondent-assessee should have started manufacture or production of articles or things or computer software in any electronic hardware technology park or as the case may be a software technology park if the said manufacture commenced after 1.4.1994. The expression Software Technology Park has been defined in clause (vii) of Explanation 2 of section 10A as: - software technology park means any park set up in accordance with the Software Technology Park Scheme notified by the Government of India in the Ministry of Commerce and Industry; 4. In this backdrop it would be necessary to note that the respondent-assessee had furnished a registration issued by the Software Technology Parks of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor of STPs issued in the past. Therefore, with a view to avoid infructuous demand raised in assessment and reassessment of assessees claiming deduction under section 10A, it has been decided that the claim of deduction under section 10A, shall not be denied to STP units only on the ground that the approval/registration to such units has been granted by the Directors of Software Technology Parks. However, it has to be ensured that all other conditions specified in section 10A are fully satisfied before allowing any such claim. 7. In cases where assessments/reassessments have already been completed, and the claim under section 10A has been disallowed only on the ground that the approval to the STP has not been granted by the Inter-Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectors of the Software Technology Parks of India have the authority of the Inter-Ministerial Standing Committee and that all approvals granted by the STPI Directors are therefore deemed to be valid. The position is also clear from a letter dated 6.5.2009 issued by the Central Board of Direct Taxes to the Joint Secretary, Ministry of Commerce and Industry wherein a distinction has been drawn between the provisions of section 10A and 10B of the Income Tax Act, 1961 and in which it has been clarified that a unit approved by the Director under the Software Technology Parks scheme will be allowed exemption only under Section 10A as a STPI unit and not under 10B as a 100% export oriented unit. It is therefore, clear from the above instruction an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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