TaxTMI 
TaxTMI 
2018 (4) TMI 1844
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd providing software services to Talent Beat Inc.,USA and hence, he is eligible to claim the deduction u/s.10A in respect of the said Income. b. The major revenue has been derived by the assessee from development of whizpay software for the clients of Talent Beat lnc.,USA . c. The said software is highly customized and the same is not available off the shelf. d. Apart from the sale of whizpay software, the assessee has also received revenue on account of software development for Smart SCM LLC. e. The appellant rendered the services III pursuance of the Master Software Development Agreement dated 20.03.2009 entered by the appellant with Talent Beat Inc., USA. f. The services rendered by the appellant fall within the definition of computer software enumerated in the CBDT Notification No.SO 890(E), dated 26.09.2000 issued in terms of sub clause (i) of Explanation 2 to section 10A. g. Software maintenance services clearly fall within the category of remote maintenance services. h. Talent Beat Inc., USA is a separate entity registered in USA and it has employee strength of about 10 employees. 3. Without prejudice t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts. For the sake of completeness, said notings is extracted as under: "1] The assessee is in the business of developing and exporting the computer software and the name of his prop. concern is 'Talent Beat'. His concern is duly registered with STPI and he grant the relief ofRs. 1,03,89,9311- u/s.10A on account of export of software. The A.O. and the CIT(A) denied the relief on four grounds which are mentioned by the CIT(A) in para 11, page 13 of his order and they are - a. Development and export of software has not been proved. b. The bills raised do not substantiate software development. c. The agreement between both the parties are collusive in nature as it is between assessee as a prop. and assessee as a CEO of Talent Beat Inc. USA. d. Claim of software export has not been proved with evidence. 2] The assessee has an unit which manufactures software in India. It is registered with STPI. It exports various kinds of software which has mentioned on page 37 of the Paper Book. The assessee is the CEO of Talent Beat Inc. USA which procures the orders for software from the customers and in turn, places such orders on the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndia and exported the same. On page 124, the assessee has given the chart for various years and it is to be stated that the deduction u/s 10A is allowed for all the 10 years except this year. For two years i.e. A.Ys. 2003-04 and 2008-09, in the assts. u/s. 143(3) this deduction has been allowed after verification (page 133 and 149). Accordingly, the assessee submits that there is no reason to disallow the deduction in this year. Assessee relies on ITAT, Pune decision in the case of Ygyan Consulting P. Ltd wherein on similar facts it is held that if the deduction is allowed in the first year of claim then it cannot be disallowed in the later year. In this context, it has relied upon Bombay H.C decision in the case of Paul Brothers [216 ITR 548]. 7] Accordingly, the assessee submits that the A.O. and the CIT(A) are not justified in denying the claim of deduction u/s 10A." 6. On the other hand, the Ld. DR for the Revenue filed brief summary of the assessee-Company providing the details of the activities of the assessee. He also enclosed certain downloaded documents relating to the issue under consideration. Drawing our attention to Page 43 of the paper book, the Ld. DR for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of Hon'ble Jurisdictional High Court in the case of Paul Brothers (supra.) as well as the order of Tribunal in the case M/s.Ygyan Consulting Pvt. Ltd. (supra). Relevant portion of the decision of the Tribunal in the case of M/s.Ygyan Consulting Pvt. Ltd. (supra) is extracted as under: "6.We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. The first ground raised in appeal by assessee is with respect to assessee's eligibility for claiming deduction u/s. 10A of the Act. It is an undisputed fact that the assessee company was incorporated in the year 1991. The documents on record show that the assessee was granted STPI approval on 30-03-2000. Before grant of approval the assessee could not have claimed deduction u/s. 10A of the Act. The ld. AR has stated at the Bar that first year for claiming deduction u/s. 10A was assessment year 2001-02. Though the ld. AR could not place on record assessee's return of income in assessment year 2001-02 and the assessment order for the said assessment year, however, the assessee has furnished a copy of assessment order for assessment year 2004-05. A perusal of t....