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Showing contexts for: softex in Deputy Director Of Income Tax vs Virage Logic International on 9 November, 2016Matching Fragments
4. The assessee had developed a software known as "Softex Form", and exported it through data communication links. It received consideration and furnished the relevant clarification which was accepted by the STPI authorities. It also received remittances from the head office towards the export/ transmission of such software. It reported a profit of Rs. 2,66,95,445/- for AY 2002-03 and filed a return seeking exemption under Section 10A of the Income Tax Act, 1961 (in short 'Act').
7. The Commissioner of Income Tax (Appeals) [CIT(A)], on being approached by the assessee, upheld the AO's order. In was in these circumstances an appeal was instituted before the ITAT.
8. The ITAT in its impugned order took note of the transaction and analysed Section 10A(7) of the Act and its inter-relationship with Section 80-IA (8). The ITAT inter alia concluded as follows:
"....13. In the present case there is no dispute that the asseseee developed "Computer Software" and transmitted electronically to its head office. The assessee is an approved 100% export oriented unit for development of computer software duly approved by the STP of India. The export of software during the previous year is evidenced by the Softex form duly certified by the competent officer of STPI. The consideration has been received by the assessee in the form of convertible foreign exchange. The only reason assigned by the Revenue authorities for denying exemption under Section 10-A of the Act is that there has been no export sale by the assessee since the computer software was transmitted to head office and since the assessee and its head office were one entity, there was no sale to any third party. This approach of the Revenue authorities were not correct in view of the provisions of section 10-A(7) of the Act. The legal fiction of treating an assessee as a separate entity vis-a-vis sale by it or transfer by it from an eligible business or to an eligible business has been recognized under section 10-A(7) of the Act....."