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TMI Blog2020 (11) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... andidates, which would meet the requirements on the customers. Role of the company is to create an electronic database of qualified personnel and transmit data through electronic means to the client. The Commissioner of Income Tax (Appeals) has also found that the assessee is in the business of supply of manpower from India to its Foreign clients after their recruitment in India. Thus, irrespective of the fact whether or not the assessee provides training to its employees or to the employees who are recruited by its clients, since, the assessee is engaged in providing human resource services, its case is squarely covered by Notification dated 26.09.2000. Therefore, the assessee is entitled to the benefit of deduction under Section 10A - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 6 separate units, each in Bangalore and Chennai. The assessee filed the return of income for the Assessment Year 2007-08 on 31.10.2007 and claimed deduction under Section 10A of the Act only in respect of 4five units viz., unit Nos.2 to 6 to the extent of ₹ 1,24,77,99,092/- and reflected the income after the deduction at ₹ 29,30,45,240/-. The Assessing Officer by an order dated 24.12.2010 re-computed the deduction under Section 10A of the Act by reducing the recruitment fee from the export turnover. The assessee thereupon filed an appeal before the Commissioner of Income Tax (Appeals) who by an order dated 24.10.2011 affirmed the order passed by the Assessing Officer and held that income from human resource services is not eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of deduction under Section 10A of the Act cannot be granted to the assessee. It is urged that mere compilation of information of certain candidates in computers does not amount to Information Technology enabled services and in the prevalent circumstances, mere use of computer cannot be held to be Information Technology enabled service. It is also submitted that the nature of activity carried on by the assessee is clear from the reply submitted by the assessee before the Assessing Officer as well as Commissioner of Income Tax (Appeals) and the tribunal and from the stand taken by the assessee before the authorities, it is evident that the assessee is not entitled to deduction under Section 10A of the Act. It is also urged that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the other companies is required. Lastly, it was urged that the fact whether or not the assessee had incurred expenses for training of its own employees or for the employees of other companies requires factual determination. 6. On the other hand, learned counsel for the assessee submitted that assessee itself is a software company and has been given the benefit of computation of deduction under Section 10A of the Act. It is further submitted that human resource services extended by the assessee are entitled to deduction even without training. In this connection, learned counsel for the assessee has invited the attention of this court to Notification dated 926.09.2000 issued by Central Board of Direct Taxes (CBDT) in exercise of po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputer software, as the case may be, shall be allowed from the total income of the appellant : Xxxxxx (2) This section applies to any undertaking which fulfils all the following conditions, namely : (i) it has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year (a) commencing on or after the 1st day of April, 1981, in any free trade zone; (b) commencing on or after the 1st day of April, 1994, in any electronic hardware technology park, or, as the case may be, software technology park; (c) xxxx Explanation 2 to Section 10A Computer software means- (a) Any computer programme recorded on any disc, tape, perforated media or other information storage devic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information technology enabled products or services, as the case may be, for the purpose of said clauses, namely : (i) Back-office Operations ; (ii) Call Centres ; (iii) Content Development or Animation ; (iv) Data Processing ; (v) Engineering and Design ; (vi) Geographic Information System Services ; (vii) Human Resources Services ; (viii) Insurance Claim Processing ; (ix) Legal Databases ; (x) Medical Transcription ; (xi) Payroll ; (xii) Remote Maintenance ; (xiii) Revenue Accounting ; (xiv) Support Centres, and ; (xv) Web-site Services. 9. The aforesaid Notification has been issued with an object to outsourcing service industry in India as it generates employment and helps in earning Forei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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