In a major relief to NDTV, Justices S. Muralidhar and Prathiba M Singh held that the television programmes produced by it comes within the ambit of ‘computer software’ under clause (b) to the Explanation to Section 80HHE of the Income Tax Act and therefore, the channel is entitled to deduction.
In the instant case, the New Delhi Television Limited (‘NDTV’), engaged in the production of news software television programmes claimed that television news software produced and exported by them outside the country was customized electronic data eligible for deduction under Section 80 HHE of the Income Tax Act, 1961.
The department took a view that deduction u/s 80HHE can be allowed only if “export of computer software is made.
On second appeal, the Tribunal allowed the plea of the assessee.
The bench, while dismissing the departmental appeal, observed that there are two parts to the definition ‘computer software’. First is the exhaustive definition where the word “computer software” is used and this is followed by ‘any computer programme recorded on any disc, tape, perforated media’. Then there is the inclusive part of the definition where the word includes any such programme or any customized electronic data. The expression ‘any customized electronic data’ is preceded by the disjunctive ‘or’ which clearly indicates that any customized electronic data would also be considered to be ‘computer software’ under the inclusive part of the definition. The principle of ejusdem generis will not apply in the instant case particularly in the context under which this provision was introduced.
It further relied on the departmental circular which explained the rationale behind introduction of these words. “It acknowledged that “software exports have grown exponentially in recent years” and there was need to increase India’s market share in the international arena. Therefore, the expression ‘any customized electronic data’ requires a liberal interpretation. The amendment to clause (b) of the Explanation makes it more explicit. Section 80HHF (1) now envisages computer software including television news software.”
Read the full text of the Judgment below.
