TMI Blog2007 (5) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant previous year (but paid on September 6, 1994). For the assessment year 1995-96 the tax was deducted during the relevant previous year and while most of the amount (Rs. 1,97,23,418) was paid during the relevant previous year, a small amount of Rs. 11,011 was deposited on July 6, 1995. On a reading of section 40(a)(i) of the Act, we are of the view that the Assessing Officer erred while the appellate authorities rightly held in favour of the assessee. No substantial question of law arises for consideration. Deduction u/s 80-IA - whether the assessee manufactures any goods - HELD THAT:- It is true that the meaning of the word manufacture as used in the Central Excise Act, 1944 cannot be automatically applied to the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues that have been urged by the Revenue. 3. The assessee is a 100 per cent. subsidiary of Oracle Corporation, USA and was incorporated with the object of developing, designing, improving, producing, marketing, distributing, buying, selling and importing of computer software. The assessee is entitled to sub-licence the software developed by Oracle Corporation, USA to its local clients. 4. The assessee imports master copies of the software from Oracle Corporation, USA. These are then duplicated on blank discs, packed and sold in the market along with the relevant brochures and information by way of a sub-licence. The assessee pays a lumpsum amount to Oracle Corporation, USA for the import of the master copy and in addition thereto it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is pay able outside India, on which tax has not been paid or deducted under Chapter XVII-B : Provided that where in respect of any such sum, tax has been paid or deducted under Chapter XVII-B in any subsequent year, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid or deducted. 7. The interpretation given by the Assessing Officer to the above provision was that tax must not only be deducted but also actually paid within the relevant previous year. 8. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) (CIT(A)) who relied upon a decision of the Rajasthan High Court in Addl. CIT v. Farasol Ltd. [1987] 163 ITR 364 for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting a blank disc and copying the software onto it. The duly formatted disc with the software is then packed and sold in the market along with the relevant brochures. According to the Assessing Officer, this did not amount to manufacture and this view was affirmed by the Commissioner of Income-tax (Appeals). 12. The Tribunal made a note that in fact the assessee converted blank discs (which are raw material for it) into software loaded discs with the help of the imported master copy. This by itself amounted to a change or a conversion of the blank disc into a different and distinct commercial product which was then marketed after labelling and packing. 13. The Tribunal took into consideration the decision of the Supreme Court in Gram ..... X X X X Extracts X X X X X X X X Extracts X X X X
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