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2019 (1) TMI 1732 - ITAT CHENNAIProduct development expenses incurred in foreign currency - CIT(A) has taken a view that expenditure for development of products cannot be reduced from export turnover as against the view taken by the Assessing Officer otherwise - HELD THAT:- CIT(A) has deleted this addition by following the Tribunal orders by the time the decision of Special Bench in M/S ZYLOG SYSTEMS LIMITED VERSUS THE INCOME TAX OFFICER [2010 (11) TMI 76 - ITAT, CHENNAI] has also come, which confirms the finding of the ld. CIT(A) that development of product is different from rendering of technical services and therefore, it is not required to be excluded from the export turnover. Consequently, by respectfully following the Special Bench decision(supra)we cannot allow the grounds raised by the Revenue. Reopening of assessment u/s 147 - HELD THAT:- We are in agreement with the ld. CIT(A) as the Assessing Officer has formed the opinion that income to that extent has escaped assessment. Expenses claimed by the assessee with regard to taking over of contracts with clients alongwith their business as claimed by the assessee (at 1/5th) - CIT(A) failed to note that the expenditure incurred by the assessee is for the purpose of warding of competition and hence the same is to be disallowed as capital in nature - HELD THAT:- We find that the facts of this issue are incomplete and further investigation of facts regarding application of 35DD or otherwise is required. The Tribunal being the final fact finding body, it becomes imperative that the issue should be churned afresh to cull out the exact facts of an issue. Hence, we restore this issue to the file of the Assessing Officer. The decisions relied on by both the parties on the issue shall be taken into consideration by the Assessing Officer. The Assessing Officer shall decide the issue anew after giving opportunity of hearing to the assessee. The grounds raised by the Revenue are allowed for statistical purposes.
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