Tower No.5, 3 r d Floor to 6 t h Commissioner of Income floor, International Tax 10(3)/ ITO, Range Infotech Park, Vashi, 10(3)(1), Navi Mumbai 400 703. Mumbai. PAN :AAACI 5205Q Appellant Respondent आयकर अपील सं. / ITA No. 2616/Mum/2010 & 128/Mum/2011 नधारण नधारण वष /Assessment Years 200304 & 200506 The Asstt. Commissioner of 3i Infotech Limited, Income Tax 10(3)/ ITO, Vs. Tower No.5, 3 r d Floor to Range 10(3)(1), 6 t h floor, International Mumbai. Infotech Park, Vashi, Navi Mumbai 400 703. PAN.AAACI 5205Q Appellant Respondent Assessee by: Shri P.J.Pardiwala Revenue by : Shri Ajit Kuamr Jain सनवाई ु क तार ख / Date of Hearing : 14/08/2013 घोषणा क तार ख /Date of Pronouncement : 21/08/2013 2 ITA NOS.3354/MUM/2010 & Others 3i Infotech Limited. आदे श / O R D E R PER Appeals for assessment year 200304 are cross appeals and are directed against the order passed by Ld. CIT(A)15, Mumbai dated 11/1/2010. Appeal for assessment year 200405 is assessee's appeal, which is directed against order passed by Ld. CIT(A)15, Mumbai dated 11/1/2010. Appeals for A.Y 200506 are cross appeals and they are directed against order passed by Ld. CIT(A)15, Mumbai dated 26/10/2010. Appeal for assessment year 200607 is appeal filed by the assessee which is directed against assessment order dated 25/10/2010 passed under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (the Act). The grounds of appeal in all these appeals read as under: Grounds of ITA No.3354/Mum/2010,A.Y.200304Assessee's Appeal: "The appellant objects to the order of the Commissioner of Incometax (Appeals) 15, Mumbai ('CIT(A)') dated 11 January 2010 for the aforesaid assessment year on the following among other grounds: Software development expenses 1. The learned CIT(A) erred in confirming the disallowance of expenses of Rs. 16,74,93,240 incurred on development/upgradation of various software products. 2.The learned CIT(A) erred in rejecting the alternative claim of appellant that the software development expenses incurred by the appellant was in the nature of research and development expenditure and therefore allowable as a revenue expenditure. 3.The learned CIT(A) erred observing that "it is not clear from material on record as to whether all the conditions given in section 35(1) (iv) is satisfied in this case or not" Transfer of employees to foreign subsidiaries 4. The learned CIT (A) erred in confirming the action of the assessing officer in adding an amount of Rs.13,34,0 18 to the total income of the appellant, as consideration for transferring certain employees to associate enterprises (ICICI Infotech Inc., ICICI Infotech Pte Ltd and Semantic Solutions GmbH), without appreciating the fact of the case that the appellant is not engaged in the business of that of a placement agency. These employees were mainly marketing personnel and their transfer is a prudent business decision considering the 3 ITA NOS.3354/MUM/2010 & Others 3i Infotech Limited. overall benefit of the business and no significant cost was incurred for training them. 5. The learned CIT (A) erred in not allowing relief to the appellant with regard to transfer of a managing director to USA without appreciating the fact that the m