The Tax Publishers2020 TaxPub(DT) 4910 (Karn-HC) : (2020) 429 ITR 0546 : (2021) 277 TAXMAN 0001

INCOME TAX ACT, 1961

Section 10A

Irrespective of the fact whether or not assessee provided training to its employees or to the employees who were recruited by its clients, since, assessee was engaged in providing human resource services, its case was squarely covered by Notification dated 26-9-2000 and, therefore, assessee was entitled to the benefit of deduction under section 10A.

Deduction under section 10A - Allowability - Assessee engaged in human resource services -

Assessee, engaged in human resource services, claimed deduction under section 10A. AO held that assessee was not engaged in human resource services and was engaged only in the business of placement which was akin to a commission agent and, therefore, deduction under section 10A could not be granted to assessee. Assessee submitted that human resource services extended by the assessee were entitled to deduction even without training. In this connection, assessee took plea of Notification dated 26-9-2000 issued by (CBDT). Held:Notification dated 26-9-2000 issued by Central Board of Direct Taxes (CBDT) has been issued with an object to outsourcing service industry in India as it generates employment and helps in earning Foreign Exchange. Assessee admittedly was involved in providing human resource services and from the perusal of the order passed by AO it was evident that nature of activity of assessee was maintenance of computerized database with regard to various types of qualified Information Technology personnel available in India and company provided customers with information to potential candidates, which would meet the requirements on customers. Thus, role of company was to create an electronic database of qualified personnel and transmit data through electronic means to the client. Thus, irrespective of the fact whether or not assessee provided training to its employees or to the employees who were recruited by its clients, since, assessee was engaged in providing human resource services, its case was squarely covered by Notification dated 26-9-2000. Therefore, assessee was entitled to the benefit of deduction under section 10A.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08



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