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TMI Blog2006 (10) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... received US$ rendered Astral 5,000 4-6-1999 Development of SystemsInc. 11-8-1999 website California city4u.com Itouchu 5,000 31-1-2000 Designing and Corporation 21-2-2000 programming Tokya services The Assessing Officer has disallowed the claim of the assessee holding that the consulting work done by the assessee in earning foreign exchange does not constitute 'design' within the meaning of section 80-0 of the Act as amended by the Finance Act, 1997 with effect from 1-4-1998. Aggrieved, the assessee preferred an appeal before the CIT (Appeals). The CIT (Appeals) confirmed the action of the Assessing Officer. Aggrieved, the assessee is in appeal before us. 4. Before us, the ld. Counsel for the assessee argued that the assessee is engaged in the business of computer maintenance and services and deduction is allowable in respect of patent, design, invention and registered trade mark as prescribed under section 80-O of the Act. The ld. Counsel for the assessee has drawn our attention to a copy of agreement with Astral Holdings for providing consultancy work for the website www.city4u.com and setting up a news desk and news coverage for city4u.com. He argued that the develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention and design" in between these words clearly show that these words did not constitute a class of their own and all the words used therein were words having individual meaning and that no class of the same nature was determinable there from. 5. On the other hand, the ld. Departmental Representative relied on the orders of the lower authorities. 6. We have heard the rival contentions and perused the material placed before us. First of all, we have gone through the provisions of section 80-O as amended by the Finance Act, 1997 with effect from 1-4-1998 which reads as under: "Deduction in respect of royalties, etc., from certain foreign enterprises. 80-O Where the gross total income of an assessee, being an Indian company or a person (other than a company) who is resident to India, includes any income received by the assessee from the Government of a foreign State or foreign enterprise in consideration for the use outside India of any patent, invention, design or registered trade mark and such income is received in convertible foreign exchange in India, or having been received in convertible foreign exchange outside India, is brought into India, by or on behalf of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated. Assessee performed the contract and developed the software/website, asseesee's job as consultant/contractor ends there. At no point of time assessee is the owner of the alleged 'designs'. Assessee's consultancy and development work involves design, at the most, to the extent of general planning or arrangement of work which cannot be equated with the 'design' as appearing in section 80-O. It is pertinent to note that every job/k work involves some kind of design i.e., of general planning, thinking and creativity. Hence, it cannot be held that every job which generates foreign exchange is eligible for deduction under section 80-O, since it involves some kind of design." 7. First of all, we have gone through the meaning of the word 'design' as per Concise Oxford English Dictionary which reads as under: "Design-1 a plan or drawing produced to show the look and function or workings of something before it is built or made.> the art or action of conceiving of and producing such a plan or drawing.> purpose or planning that exists behind an action or object. 2 a decorative pattern. V. decide upon the look and functioning of (something), especially by making a detailed drawing of it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebpage (also spelled - Web page) is part of a Web site. You can think of a Web site like a book that arrives a page at a time as you request each one. Each page of this book is an individual HTML file with its own Web address. The first page you usually request at a site is known as the home page. (Most home pages have a default name like "index html" that doesn't have to be specified; you only need to enter the domain name for the site itself.) With frames, multiple pages (HTML files) can be downloaded to a browser and presented on designated sections of the display screen at the same time. Web site: (also called a site) A Web site is a collection of Web files on a particular subject that includes a beginning file called a home page. For example, most companies, organizations, or individuals that own Web sites have a single address that they given you. This is their home page address. From the home page, you can get to all the other pages on their site." 8. The assessee is designing a website for a particular client according to its needs. As per the provisions of section 80-O of the Act, deduction in respect of royalties etc., received from certain foreign enterprises are all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be optimally engineered to give the best response even for the dial-up users [4]. This factor is very important because of large, unwieldy images, however attractive they may be, consume phenomenal bandwidth and result in slow downloading of the content to the users. Currently, if a site does not download with seconds, users switch to other sites of similar interest. Thus, to retain the user wi thin the site, the images and other bandwidth consuming components must be designed in such a way, that user response is the fastest. Hence, greatest care has to shown for the response times at different test conditions and only on satisfactory results the site should be up. 3. Text Editing The text material found in the portals must be crisp, convey the point effectively using minimum words. A separate branch of study, called the technical writing focuses precisely on this aspect of conveying the idea in a simple, lucid, unambiguous and also stylish enough to retain the interests of the readers has evolved along with the progress of the Internet. [5] The quality of technical writing in creating the text content of this portal is excellent. 10. It is seen that this development work is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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