COMMISSIONER OF INCOME TAX Vs. KIRAN KAPOOR

JUDGEMENT

(1.) The questions of law which the revenue urges in support of these appeals, directed against three orders of the ITAT for AY 2003-04, 2004-05, 2005-06 and 2006-07 are:

(2.) The brief facts of the case that the assesse, an individual, in her return claimed exemption under Section 10B of the Act to the tune of Rs. 39,32,654. She claimed to be a software exporter to Netherlands. The importer was one Mr. Rolli Janssen B.V. The claim was disallowed by the Assessing Officer (AO) who added back Rs. 39,32,654/- and finalized the assessment. Dissatisfied by the view of the AO, the assessee appealed to the CIT(A), who confirmed those findings. Aggrieved by the order of the CIT(A) the assessee successfully appealed to the ITAT. The revenue is, therefore, in appeal under Section 260-A of the Act.

(3.) Mr. Balbir Singh, learned counsel for the revenue argued that the ITAT fell into error on both the questions. Stating that the process deployed by the assessee was neither "manufacture" nor did it amount to creation of software, he supported the orders of the AO and CIT(A). He urged that the asseessee was unable to establish that computer software is manufactured or produced by it. He contended that the conditions specified in Section 10B, Explanation 2 (1) viz, "any customized electronic data or any product or service of similar nature, as may be notified by the CBDT, which is transmitted or exported from India to any place outside India by any means" had a precondition for a successful claim under the Act. He argued that the ITAT fell into error in disturbing the concurrent finding of the authorities below.