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The Deputy Commissioner of Income Tax, Circle-11 (4) , Bangalore Versus M/s Informatics India Ltd.

2016 (9) TMI 440 - ITAT BANGALORE

Allowability of deduction u/s 10A - Held that:- From the Tribunal order in AY: 2009-10, it is seen that in that year, the matter was restored back to the file of the AO for a fresh decision regarding assessee’s claim for deduction u/s 10A of the IT Act, 1961, instead of Sec.10B of the IT Act, 1961 claimed earlier. In the present year also, the entire discussion in the assessment order is regarding allowability of deduction u/s 10B of the IT Act and there was no claim before the AO for deduction .....

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s revenue s appeal directed against the order of the ld. CIT(A)-I, Bangalore dated 30-05-2014 for the assessment year 2010-11. 2. In this appeal, the Revenue has raised the following grounds; l. The order of the CIT (A) is opposed to law and the facts and circumstances of the case. 2. The CIT"(AY erred in following the decision of the ITAT in ITA No.1504/Bang/Z013 dtd.16-4-Z014 in the assessee's own case and directing to allow deduction u/s.10A without appreciating that in the relied up .....

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he said order. 4. The CIT (A) erred in holding that the assessee was engaged in the business of manufacture of computer software as envisaged in section 1OA/1OB without appreciating that being in the business of computer software only does not entitle an assessee to claim deduction which is specifically provided to those assessees who manufacture or produce any article or thing of computer software. 5. The CIT (A) erred in not appreciating the fact that the Clause (v) of sec.1OB states that the .....

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at the assessee was entitled to the benefits of deduction, it has to be denied the said benefit for non-compliance to the mandatory requirement of law. 7. The CIT(A) erred in allowing the appeals of the assessee and directing the AO to allow deduction u/s 10A even though he assessee had claimed deduction u/s 10B by filing form 56G rw rule 16E without appreciating that the assessee had not furnished form 56F rw rule 16D for claim of deduction u/s 10A along with the return, but filed it before the .....

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the above grounds may be reversed and hat of the AO may be restored. 9. The appellant craves leave to add, alter, amend or delete any of the grounds that may be urged at the time of hearing of the appeal . 3. The ld. DR of the revenue supported the assessment order. He submitted that in AY: 2009-10 in ITA No.1504/Bang/2013 dated 16-04- 2014, the issue regarding the allowability of deduction u/s 10A was restored back to the file of the AO for a fresh consideration. He also submitted that in the i .....

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of the Tribunal in AY: 2009-10 or the Tribunal may restore the matter back to the file of the AO for a fresh decision in the line with the same directions as were given by the Tribunal in assessee s own case for the AY: 2009-10. As against this, the ld. AR of the assessee supported the order of the ld. CIT(A). He also placed reliance on the judgment of Hon ble Karnataka High Court rendered in the case of M/s Maxim India Integrated Circuit Design Pvt.Ltd., in ITA No.465 of 2008 dated 26-07-2011, .....

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data processing and content development falling within the Notification issued u/s. 10A of the Act, has not been examined by the AO in the proper perspective. On the abstracting and indexing services, the AO has relied on the revenue recognition as explained in the Notes to Accounts of the assessee wherein there is a reference to sale of printed e-journals subscriptions . From the same, he has concluded that the assessee was in the business of e-trading. We fail to see as to how the revenue rec .....

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& Indexing Services were not in the nature of Data Processing or contend development. We are of the view that the expression Data Processing will have to receive a broad meaning, keeping in view the purpose behind the provisions of Sec.10A/10B of the Act which is to augment foreign exchange earnings. 18. With regard to the directory compilation and updating services , the AO has merely observed that the same is nothing but providing technical services to clients. In our view the above servic .....

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eadable text would be only rendering of technical services. We are of the view that the said service would be in the nature of Content Development as envisaged in the CBDT circular referred to in the earlier part of this order. 20. With regard to metadata compilation and updating services , he has merely observed that the assessee was only providing data and that would be only providing technical services. In our view the said service would fall either within the expression Content Development o .....

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ged in Sec.10A/10B of the Act. 22. Admittedly the Assessee did not have the required approval as envisaged u/s.10B of the Act. The Assessee however claims it has the required approval for allowing deduction u/s.10A of the Act. With regard to the question as to whether the assessee can be allowed to shift the claim for deduction from section 10B to section 10A of the Act, we have already seen that in the past the assessee had been claiming deduction u/s. 10A of the Act. In our view, the decision .....

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10A of the Act in the light of the observations made by us in the earlier part of this order. Accordingly, we set aside the order of the CIT(Appeals) and remand the issue to the Assessing Officer for fresh consideration claim of the Assessee for deduction u/s.10A of the Act. The Assessing Officer will decide the issue afresh after affording the assessee opportunity of being heard . 5. From the above paras of the Tribunal order in AY: 2009-10, it is seen that in that year, the matter was restored .....

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