TaxTMI 
TaxTMI 
2001 (1) TMI 918
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....st information regarding schedules and availabilities of worldwide participation in the AMADEUS system, and create reservation data and records which are processed and exported immediately into the system, while data created is simultaneously processed in the Amadeus Data Processing Centre abroad in Erding, Germany and confirmed through creation of a record locator. 4. Every time an agent makes an air, hotel, car or other travel related booking through Amadeus system it is measured in terms of segments. For example a ticket booking done for Delhi-Bombay-Frankfurt-Delhi for one passenger would amount to three segments-One segment for Delhi-Bombay, the second for Bombay-Frankfurt and the third segment for Frankfurt-Delhi. After the agent creates these segments this data is received and exported to Host System Amadeus abroad through Amadeus Computers where segments messages are immediately processed. 5. Amadeus India (P.) Ltd. raises invoices every month to Amadeus Madrid on the basis of total number of segments generated/exported as explained above which is remitted in hard currency by Amadeus Madrid. 6. The Assessing Officer examined the allowability of deduction under sect....
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.... assessee was a "programme" or "data" and "data entry transaction". The Assistant Director (Tech) of STP vide his letter dated February 26, 1998, replied as under : "Amadeus (India) (P.) Ltd. is involved in data processing activity/data entry jobs. They have a main computer in Delhi which is connected to various travel agents in India, via, satellite links. Whenever a reservation has to be made the travel agents get connected to the Central Reservation System (CRS) at Amadeus which processes the data for its correct format. If the format is correct the data is sent to Germany for the availability of the tickets on a particular flight on a given date and time. Amadeus (I) Pvt. Ltd. is connected to their German counterpart, via, leased lines. The data is further processed in Germany for the correct status of booking. The data are sent in segments. Amadeus (I) Pvt. Ltd. bills their counterpart on the basis of per segment basis. A sample copy is enclosed, also enclosed is a sample invoice. The nature of activity of Amadeus (I) Pvt. Ltd. is as data entry/data processing job. Data entry/data processing is a software development as defined by Customs Notification No. 10 of 1996, ....
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....that the ESC authorities nowhere pointed out that the assessee was developing software as per commonly accepted computer technology. He also observed that the ESC has referred to some customs notification to substantiate its views. The ESC has rather feebly and weakly argued that since as per customs notification data processing activities were also entitled to certain exemptions the same should be applicable to deduction under section 80HHE of the Act. The Assessing Officer also referred to the reference made by the assessee to NIC vide letter dated March 11, 1998, for further clarification in which the assessee itself had mentioned that the nature of their activities was data processing/data entry. After considering the submissions of the assessee in response to show cause by the Assessing Officer as to why deduction under section 80HHE may not be disallowed, the Assessing Officer, inter alia, held that : (1) As admitted by the assessee vide its letter dated December 8, 1997, the activities of the assessee were that of data processing and not software development. (2) As admitted by the assessee in the said letter it was engaged in the export of data processing/....
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....ot have any data. In the absence of data the computerised reservation system is a programme. While referring to annexure I depicting the nature of activities of the assessee the learned Departmental Representative argued that from India only data/information is transmitted and entire processing is done in Germany. Thus even the segments are created in Germany. While relying on clause 10.6 of the distribution agreement between Amadeus Marketing S.A. Spain and the assessee which has prescribed the obligation of the assessee-company the learned Departmental Representative stated that software development, if any, made by the assessee was for the reasonable needs of the subscribers and was not to be exported out of India. Regarding customs notification issued by the Ministry of Finance, Department of Revenue (on which ESC has placed reliance in its opinion), the learned Departmental Representative stated that the Customs Act and the Income-tax Act were two different Acts. For the purpose of the Customs Act certain activities might have been treated as computer software programme. But under the Income-tax Act, the word "computer software" has been defined in Explanation (b) to section 8....
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....arua [1970] 75 ITR 18 (SC) and H. H. Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61 (SC). It was also argued that the meaning of a particular word should be adopted which was more compatible to the entire word unless the contrary meaning was given to a particular Act. He stated that at page 2 of his order the Assessing Officer has admitted that the assessee was engaged in the export. His objection was that what was being exported by the assessee was only "processed data" and not "computer programme". Learned counsel wound up his arguments by stating that the assessee was preparing a computer software programme and was exporting the same through computers. The Commissioner of Income-tax (Appeals) has rightly appreciated these facts and allowed relief to the assessee under section 80HHE of the Act. 16. We have considered the rival submissions. The main business activity of the company is to make customers (mainly travel) agents online with AMADEUS CRS System. For connectivity to Amadeus system agents are supplied with free of cost computers systems which are being provided by GTS. The agents are also provided with training and system usage, free of charge by Amadeus India P....
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.... 1998, with effect from April 1, 1999, by which after the words "any such programme" and before the words "which is transmitted from India" the following words have been inserted : "or any customised electronic data". 22. The above Explanation as amended by the Finance (No. 2) Act, 1998, has further been substituted by the following with effect from April 1, 2001, by the Finance Act, 2000 : "(b) 'Computer software' means,- (i) any computer programme recorded on any disc, tape, perforated media or other information storage device ; or (ii) any customised electronic data or any product or service of similar nature as may be notified by the Board, which is transmitted or exported from India to a place outside India by any means:" 23. The Revenue's case is that whatever the assessee records on disc, tape, perforated media or other information storage device is not a "computer programme". Similarly what is transmitted from India to a place outside India by any means was not a "computer programme" but only data which could make a programme. But the claim of the assessee is contrary to what is stated by the Revenue. We find that the words "com....
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....lanation (b) to section 80HHE "computer software" means a "computer programme recorded on any disc, etc. and includes in such programme which is transmitted from India to a place outside India by any means". What the Assessing Officer should have examined was whether the assessee was exporting any computer programme or not. If an analysis of the activities carried on by the assessee is made it transpires that the assessee was exporting the instructions through computer which was capable of causing a computer to perform a particular task or achieve a particular result. As the words "computer programme" has not been defined under the Income-tax Act but has been defined under the Copyright Act, 1957, the activities carried on by the assessee clearly fulfils the conditions mentioned in the Copyright Act. Thus, the Page No: 0033 activities carried on by the assessee clearly fulfils the conditions for claim of deduction under section 80HHE of the Act. 26. We also find that when the Assessing Officer was not satisfied with the explanation of the assessee he had made a reference to STP. The Assistant Director, STP, vide his letter dated February 26, 1998, had replied to the Assessing Of....
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....1995] 211 ITR (St.) 26), issued a similar clarification and extended the benefit of section 80HHE to software prepared "on-site" abroad. The clarifications issued by the Central Board of Direct Taxes through the aforesaid circular provided the much desired uniformity of the Government policy among the Department of Electronics, CBEC and Central Board of Direct Taxes. 28. In early 1996 further new areas of software related activities like data entry and conversion, data processing, data analysis and control and data management emerged in international trade in which India could grab a significant share in exports. These activities are covered by the definition of "computer programme" as given in Copyright Act. Accordingly, the CBEC on the recommendations of the Department of Electronics issued further clarifications that export benefits will be available to EOU/STP units who export out of India all software developed, data entry and conversion done, data processed, data analysis and controlled or data management done. The CBEC substituted the words "development of software" with the words "development of software, data entry and conversion, data analysis and control or data manag....
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....ssing Officer has not supplied the complete information about the activities of the assessee to NIC. The opinion based on incomplete information cannot be relied upon. Moreover, when the opinion from NIC was received by the Assessing Officer the assessee was asked as to why the claim of the assessee for deduction under section 80HHE may not be disallowed, the assessee made a reference to ESC also. ESC vide their letter dated March 10, 1998, addressed to the Assessing Officer opined as under : "If you go by the definition of section 80HHE of the Income-tax Act, that also clearly says that section 80HHE is applicable to a person who is engaged in the business of export out of India of computer software. . . . Since, the Ministry of Finance at various occasions have given elaborate definition of computer software after detailed consultations with the technical authority like the Department of Electronics, it would be appropriate that benefit under section 80HHE are extended to Amadeus India Pvt. Ltd. against their export of computer software to which they are entitled. In case of any doubt it is requested that the matter may kindly be referred to the Department of Electronics....
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....rores of foreign exchange for the country. There is judicial authority for the propositions that in fiscal statutes, unless the context otherwise warrants, the same expression occurring in different enactments where the colour, content and context of such statutes is the same or similar should be assigned the same meaning and that different statutes in pari materia, though made at different times or even expired and not referring to each other shall be taken and construed together as one system and explanatory to each other. There is no conceivable reason why the Government or the Legislature could or should have intended different amplitudes of expressions common to a whole batch of legislations forming part of an integrated policy in relation to the same sets of activities in an industry. 34. Even if undue importance is to be attached to the use of the word "programme" under the Act and to the need for the presence of a "computer programme" stricto sensu (in contrast to the wider compass of the language used in the customs notifications) as essential for claiming an exemption, under the Act, we are of the opinion that the assessee qualifies for exemption under the quoted secti....
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....pen to it to claim exemption under any one of these sections and as is well established by pertaining to interpretation of taxing statutes is entitled to choose that one which is most favourable to it in any particular assessment year. 36. Apart from the above facts we also find that the assessee-company submits their monthly return for exports to the competent authority which has accepted the same in discharge of export obligation. We have also noted that the export of software as per the statutory requirements are also declared on exporters declaration form SOFTEX (specimen of SOFTEX form has been filed). The competent authority, i.e., the Department of Electronics authorised official also certifies that the software described in the SOFTEX form was actually transmitted and the export value declared by the exporter has been found to be in order and accepted by the authorised officer. 37. We also find that the assessee has furnished a report of the chartered accountant in the prescribed format along with the return of income certifying that the deduction has been correctly claimed in accordance with the provisions of the section. 38. Keeping in view the above facts we hol....