2020 (12) TMI 933 - HC - Income Tax

Deduction u/s. 10A - Whether the Tribunal was correct in holding that, the assessee's activity of human resources services are IT enabled services, when the assessee was only making available the data base of qualified IT personnel and entitled to deduction u/s. 10A of the Act and recorded a perverse findings? - Whether assessee's activity of human resources services are IT enabled services, when the assessee was only making available the data base of qualified IT personnel and entitled to deduction u/s. 10A of the Act and recorded a perverse findings? - HELD THAT - Substantial questions of law framed in this appeal have already been answered against the revenue by judgment 2020 (11) TMI 653 - KARNATAKA HIGH COURT . The aforesaid submission could not be disputed by the learned counsel for the revenue.

Summary

Issues:
1. Interpretation of whether the assessee's human resources services qualify as IT-enabled services for deduction under section 10A of the Income Tax Act, 1961.

Analysis:
The High Court of Karnataka dealt with an appeal under Section 260-A of the Income Tax Act, 1961, concerning the Assessment Year 2007-08. The primary issue was whether the assessee's human resources services could be considered as IT-enabled services, thereby entitling them to a deduction under section 10A of the Act. The Court framed substantial questions of law to address this matter, focusing on whether the Tribunal's decision regarding the nature of the assessee's services was correct. The Tribunal had concluded that the assessee's activity of providing a database of qualified IT personnel qualified as IT-enabled services. The Court noted that the substantial questions of law raised in this appeal had already been answered against the revenue in a previous judgment dated 12.11.2020 in ITA No. 544/2013. The Court found that the reasoning provided in the earlier judgment applied to the current case as well.

The Court referenced the judgment dated 12.11.2020 in ITA No. 544/2013, where similar issues were addressed, and the substantial questions of law were answered against the revenue and in favor of the assessee. Based on the earlier ruling, the Court concluded that the substantial questions of law framed in the present appeal were to be answered against the revenue and in favor of the assessee. Consequently, the appeal was dismissed, affirming the decision that the assessee's human resources services were considered IT-enabled services for the purpose of claiming a deduction under section 10A of the Income Tax Act, 1961.