INCOME TAX ACT, 1961

Section 10B read with Section 80HHE (i)

Deduction under section 10B - 100 per cent export oriented undertakings - Export of computer software -

Issue under dispute was whether Tribunal was justified in reversing the finding recorded by AO that the foreign currency for providing software development services outside India should be excluded from the export turnover for the purpose of computation of deduction under section 10B. Held: The law makes a distinction between technical services rendered in connection with export of computer software and export of technical services for the purpose of development or production of computer software outside India. Thus, as the assessee was engaged in the business of export out of India of computer software and its transmission to places outside India, wherein software engineers of assessee were deputed abroad to do testing, installation, etc., though the said services were technical in nature, it does not fall within clause (ii) of sub-section (1) of section 80HHE. It falls under sub-clause (1) of sub-section (1) of section 80HHE and thus, the expenditure incurred by assessee could not be excluded in computing export turnover for the purpose of computation of deduction under section 10B.

Relied:CIT v. Motor Industries Co. Ltd. [ITA No. 776/2007, dt. 13-6-2014]

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 10B

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