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of <h1>Court affirms Tribunal's decision on deduction eligibility under Income-tax Act section 10A</h1> <h3>Commissioner of Income-tax Versus Granda Services Ltd.</h3> Commissioner of Income-tax Versus Granda Services Ltd. - TMI Issues:Interpretation of income derived from export of computer software for deduction under section 10A of the Income-tax Act.Analysis:The judgment involves a limited company engaged in providing back office services to customers, qualifying for deduction under section 10A of the Income-tax Act due to its engagement in the export of computer software. The Assessing Officer disallowed certain expenditures incurred in foreign currency, including 'speed pay' and 'ASP expenses,' from being eligible for deduction under section 10A, as they were not considered income derived from the export of computer software. The CIT(A) allowed the appeal of the assessee against this decision.The revenue challenged the CIT(A)'s decision before the Income-tax Appellate Tribunal, arguing that income received on account of 'speed pay' and 'ASP fees' should not be included in the deduction under section 10A as it was not derived from the export business. The Tribunal noted that the nature of these receipts had not been determined by the CIT(A and referred the matter back to the CIT(A) for clarification.The High Court upheld the Tribunal's decision, emphasizing that the Tribunal had not provided any findings on whether 'ASP expense' and 'speed pay' were eligible for deduction under section 10A. The Court dismissed the revenue's appeal, stating that the Tribunal had correctly referred the matter back to the CIT(A) for a determination on the nature of the receipts to establish their eligibility for deduction under section 10A.In conclusion, the judgment clarifies the importance of determining whether specific receipts are derived from the export of computer software to qualify for deduction under section 10A of the Income-tax Act. The Court upholds the Tribunal's decision to refer the matter back to the CIT(A) for further evaluation, emphasizing the need for a clear determination on the nature of the receipts before deciding their eligibility for deduction.
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