The Delhi High Court today upheld the findings of the Income Tax Appellate Tribunal (ITAT) that NDTV Ltd was entitled for income tax deductions on television news software produced and exported by it outside the country.
A bench of Justices S Muralidhar and Pratibha M Singh dismissed the Income Tax department’s appeal against the ITAT July 2004 decision, which had held that NDTV Ltd was entitled to the deduction under Section 80HHE of the Act.
“The assessee (NDTV) has in the present case discharged its onus of showing that the television programmes produced by it answers the description of computer software under clause (b) to the explanation to Section 80HHE of the Act.
“Therefore, the ultimate conclusion reached by the ITAT calls for no interference. For all the aforementioned reasons, the question framed by the court by the order dated August 17 2005 is answered in the affirmative, that is, in favour of NDTV and against the Revenue (department),” the bench said.
During the hearing of the appeal, the high court had framed a question for examination as to whether the television news software produced and exported by NDTV abroad was customised electronic data and thereby eligible for deduction under Section 80 HHE of the Act.
Section 80HHE of the Income Tax Act provides for deduction in respect of profits earned from export of computer software etc if the firm brings convertable foreign exchange into the country within a period of six months from the end of the previous year.
The income tax department had moved the court challenging the ITAT order on the ground that there was an error in the findings.
The revenue department had submitted that the matter be remanded back to the ITAT for a fresh adjudication on merits.
On other hand, NDTV counsel senior advocate M S Syali and advocate Mayank Naghad had opposed the request for remand of the proceedings.
Agreeing with the NDTV’s contention, the bench observed “considerable time having elapsed, remanding the matter to the ITAT for that purpose would only delay the matter further”.
The matter concerned NDTV’s claim under section 80HHE seeking deduction from taxability of revenue from export of News Programme to Star TV for the assessment year 1999-00.