U/s 80 (O) of IT Act

Last updated: 18 September 2007

Court :
IN THE ITAT CHENNAI BENCH ‘B’

Brief :
Section 80-O of the Income-tax Act, 1961 - Deductions - Royalty, etc., from certain foreign enterprises - Assessment year 2000-01 - Whether creation of website, being a highly specialized work which includes state of art programming, technical writing, imaging and animation skills having original ideas, artistic as well as intuitive, is designing within definition of word ‘design’ for purpose of claiming deduction under section 80-O - Held, yes The assessee-company was engaged in the business of computer maintenance and services. In its return of income for the assessment year 2000-01, the assessee claimed deduction under section 80-O on foreign exchange earned by it for designing and development of websites. The Assessing Officer disallowed the said claim on the ground that the consulting work done by the assessee in earning the foreign exchange did not constitute ‘design’ within the meaning of section 80-O. On appeal, the Commissioner (Appeals) confirmed the order of the Assessing Officer. On second appeal :

Citation :
Ontrack Systems Ltd. v. Assistant Commissioner of Income-tax, Company Circle-V(1)