2018 (1) TMI 336

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....eration. "Whether on the facts and circumstances of the case, and in law the Tribunal erred in allowing deduction under Section 10A of the Act, 1961 ignoring the fact that the assessee is not entitled to the claim of deduction under Section 10A?" 3. The Respondent - Assessee has filed a return income for the subject Assessment Year offering a sum of Rs. 9.90 lakhs after claiming benefit of exemption under Section 10A of the Act. This exemption under Section 10 A of the Act was claimed because it had set up unit at Shashtra Dhara Software Development Park (STPI) at Dehradun to develop and export PC Suit Software Chip used in mobile phones. The Assessing Officer denied the benefit of Section 10A of the Act to the Respondent Assess....

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....rder of the Tribunal granting the benefit of Section 10A of the Act, to the Appellant's Dehradun Unit is not sustainable for the following reasons:- (a) Dehradun Unit which claims the benefit of Section 10A of the Act is sham unit; (b) Dehradun Unit which claims the benefit of Section 10-A of the Act is nothing but extension of Bombay unit; and (c) The majority of the work done to manufacture the software at Dehradun to claim the benefit of Section 10A of the Act was by sourcing it from third parties. 7. We find that the impugned order itself records the fact that it is undisputed position before the Tribunal that there is a unit at Malad which has developed basic engine and there is another unit at Dehradu....

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....oyed by the Respondent - Assessee, it would lose the benefit under Section 10A of the Act. No such such bar under Section 10A of the Act on user of the third party tools has been shown to us. This is different from outsourcing the entire work of developing the software to third parties. This is even not the case of the Revenue. In any event the impugned order records the STPI park itself makes Internet sites available for free and such sites would become a part of the product development. These sites are in nature of digital library where the units in the STPI are permitted to have free access to the Internet, digital libraries and other computer peripherals. These facilities available at the Dehradun STPI were used by the Respondent - Asse....