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TMI Blog2016 (11) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... red in allowing the claim of deduction u/s 10A, amounting to Rs. 38,34,83,407/-, to the assessee without appreciating the detailed reasons given by the A.O.? ii. That the order of the learned Commissioner of Income Tax (Appeals) is erroneous and is not tenable on facts and in law. iii. That the grounds of appeal are without prejudice to each other. iv. That the appellant craves leave to add, alter, amend or forge any ground(s) of the appeal either before or at the time of hearing of the appeal. 2. The facts in brief of the case are that the assessee filed return of income declaring income of Rs. 3,50,73,287/- on 16/10/2007. In the return of income filed, the assessee claimed deduction under section 10A of the Income-tax Act, 1961 (herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2007-08 is exactly similar to the facts as in AY 2006-07. Respectfully following the aforesaid decision of the Hon'ble ITAT Delhi in the appellant's own case for AY 2006-07, I am of the view that the appellant is eligible for deduction u/s 10A. Accordingly, the A.O. is directed to allow its claim u/s 10A. These grounds of appeal are allowed." 2.2 Aggrieved, the Revenue is in appeal before us raising the grounds as reproduced above. The effective ground is in respect of allowing deduction under section 10A of the Act by the learned Commissioner of Income Tax Appeals. 3. Before us, the learned Commissioner of Income Tax (Departmental Representative) relied on the findings of the Assessing Officer and submitted that the activities of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of Section 10A is being exported outside India and thus not making services of a similar nature as such services can only be rendered on real time basis electronically to qualify for the purpose of Section 10A. Also, the TPO, by his order of 92CA(3) dated 09.10.2009 advised the concerned officer to make an upward adjustment of Rs. Rs. 59,09,890/- to the total income declared and the AO allowed the adjustment. Apart from holding that the Assessee company has furnished inaccurate particulars (the report of the auditor considered non est) with a view to evade the tax, the AO also initiated penalty proceedings under section 271(1) (e) of the I.T. Act, 1961 for filing inaccurate particulars and concealment of income. 9. Agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that Legislature, in their wisdom, has left it to the Board to decide which product or services of similar nature would qualify and should be treated as falling under clause (b), in addition to customised data processing. The intention of the Legislature was not to constrain or restrict but to enable the Board to include several services or products of similar nature in the ambit of the provision. This is what precisely the Board has done when it used the expression, „information technology enabled products or services‟ in the notification." 11. The court relied on the circular issued by the CBDT explaining the provisions of the Finance Act, 2000, and held that the interpretation of the term 'manufacture or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company by providing customized electronic data as per request received by it from parent company. It is clear from the modus operandi that what was accessed by the assessee at the STP Unit and what was delivered to Mckinsey (Parent Company) after the conversion took place were two different products/services which is described as customization of data/data processing. The STP Unit undertook the series of operations on the data received from various data bases before it was finally delivered to the customer. Thus, there was value addition made by the STP Unit on the data. We, therefore, are not in agreement with the findings of AO that there was no value of addition on the data obtained from various data base from parent company. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th respect to the findings arrived at by the lower authorities. The assessee is involved in providing back office support and thereby entitled to the benefit under the definition of the term „computer software‟. Its activities are in the nature of data processing, customization of data, acting as the back office of the parent company and acting as support center to the parent company. Clearly it could not have been deprived of the benefit of Section 10A, as is argued by the revenue. This contention is accordingly rejected as unmerited." 6. Since the issue in dispute has already been decided by the Hon'ble High Court, respectfully following the above decision of the Hon'ble High Court, we uphold the impugned order of the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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