Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2008 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (6) TMI 593 - ITAT BANGALOREDeduction u/s 10B - CIT(A) - Disallowance on telecommunication expenses. Deduction u/s 10B - CIT(A), excluded expenses incurred in foreign currency for providing software development services outside India from the 'export turnover - HELD THAT:- On the issue of exclusion of expenses incurred in foreign currency towards payments to the assessee's personnel deputed outside India , it was explained that the expenses were incurred in connection with development of software and services provided by the assessee outside India. Therefore, it is not excludible from the gross export turnover in arriving at the export turnover for computing deduction u/s 10B - The ld counsel for the assessee further explained that this is so because, the assessee is not engaged in the business of providing technical services outside India as contemplated in Explanation 2 to Sec.10B(8) of the Act. The issue raised by the assessee is squarely covered by the order of this Tribunal in the case of M/s. Infosys Technologies Ltd., vs. JCIT [2007 (10) TMI 627 - ITAT BANGALORE] ''held that the appellant company was not involved in the business of providing technical services outside India in connection with the development of computer software and directed to compute the figures of export turnover and total turnover relevant for the application of the formula in sub-section 3 of the 80HHE, no exclusion be made of any expenditure incurred in foreign currency other than those already done by the appellant company.'' Applying the same, we direct the AO to grant relief to the assessee as indicated. Disallowance on telecommunication expenses - HELD THAT:- The issue raised by the assessee is squarely covered by in the decision of Bharat Earth Movers Ltd.[2004 (3) TMI 761 - KARNATAKA HIGH COURT] ''held that Consequently, it follows that if the export turnover does not have the elements of sales tax or excise duty, the total turnover should also not have the said inputs. In the circumstances, to include excise duty and sales tax and excise duty not form part of export turnover, would be illogical and arbitrary. we direct the AO to exclude the expenditure incurred in foreign currency by the assessee from the total turnover. It is ordered accordingly - Applying the same, we direct the AO to grant relief to the assessee as indicated. In the result, the appeals filed by the assessee are partly allowed to the extent stated above.
|