AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 118
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....n Limited ('NDTV'), is engaged inter alia in the production of news software television programmes. 4. On 21st February 1997 an agreement was entered into between the Assessee and New Delhi Television (India) Private Limited ('NTVI') in terms of which it was agreed that the Assessee would be responsible for the production of the entire software (programming) for a 24-hour Indian news channel which would be supplied to NTVI which would in turn broadcast the said channel through STAR TV or enter into arrangements with other companies to provide for the broadcast of the channel. It was further agreed that NTVI would broadcast the channel via Satellite Cable or any other means deemed appropriate. Inter alia, it was agreed that the Assessee would export to STAR TV programme/footage tapes relating to the channel for the purpose of broadcasting overseas. The annual consideration payable by the Assessee for the purpose was set out in the agreement. NTVI would be solely responsible for the uplinking, transmission and distribution of the 24-hour news channel programming from Delhi, Hong Kong and/or other such programme uplinking sites, at its cost. A Memorandum of Understanding ('MoU') da....
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....t of computer software etc." Sub-section (1) of Section 80HHE states that an Indian company engaged in the business of export or transmission of computer software to a place outside India, or providing technical services outside India in connection with the development or production of computer software, would be entitled to a deduction "to the extent of the profits, referred to in sub-section (1B), derived by the Assessee from such business". Explanation (b) to Section 80HHE, as it stood during the AY, in question reads as under: "(b) 'computer software' means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme or any customized electronic data which is transmitted from India to a place outside India by any means." 10. The above clause (b) was substituted with effect from 1st April 2001 by the FA 2000, as under: "(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 transm....
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....nted out that by its letters dated 28th December 2001, 5th March 2002 and 18th March 2002 it had made detailed submissions to the AO explaining what constituted computer software and how the activity undertaken by the Assessee is export of computer software. The Assessee urged that on a harmonious construction of the words 'programme' and 'computer' it became apparent that what was produced by the Assessee fitted within the definition of 'computer programme' under Explanation (b) to Section 80HHE of the Act. 15. Without prejudice to the above submissions, the Assessee contended that "the activity of the Assessee also falls within the meaning of the expression 'customized electronic data' which was inserted with effect from 1st April 1999". The assessee pointed out that the television programme produced was customized according to the specification and directions of its customers like STAR TV etc. The format, the editorial standard, the production standard, the technical standard, the quality standard, the graphic standard, the look and free, "are all customized." Further, it was contended that considering the meaning of the word 'customized', 'electronic' and 'data', the program....
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....ng its entitlement to deduction under Section 80HHE was faulty. Mr. Singh submitted that it was not enough for the Assessee to break up the composite expression 'customized electronic data' to show that each of the individual components of that expression stood satisfied. Mr. Singh had some reservation about the question framed by the Court as it placed an unfair burden on the Revenue to show that the television news software produced by the Assessee did not fall within the expression 'any customized electronic data. It was for the Assessee to lead positive evidence to that effect. Submissions of learned Senior counsel for the Assessee 20. Mr. M.S. Syali, learned Senior counsel for the Appellant-Assessee, on the other hand opposed the request for remand of the proceedings. While Mr. Syali did not dispute that the ITAT had in the impugned order referred to a clause in the Explanation which was not applicable to the AY in question, he submitted that on merits there was sufficient material for the Court to conclude whether the Assessee was entitled to deduction under Section 80HHE. A remand to the ITAT would only further delay the matters considering that AY 1999-2000 was involv....
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....t/ready to publish book. It is also a "legal database." 25. Turning to clause (b) of the Explanation to Section 80 HHE of the Act, the Court is unable to agree with the contentions of Mr. Singh, learned counsel for the Revenue that the words "or any customised electronic data" has to take colour from the main part of clause (b) of the Explanation and cannot be construed independent of it. 26. There are two parts to the definition 'computer software'. First is the exhaustive definition where the word "computer software" is used and this is followed by 'any computer programme recorded on any disc, tape, perforated media'. Then there is the inclusive part of the definition where the word includes any such programme or any customized electronic data. The expression 'any customized electronic data' is preceded by the disjunctive 'or' which clearly indicates that any customized electronic data would also be considered to be 'computer software' under the inclusive part of the definition. The principle of ejusdem generis will not apply in the instant case particularly in the context under which this provision was introduced. 27. Circular No. 772 dated 23rd December 1998 explained ....