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2019 (5) TMI 1539 - ITAT BANGALOREDeduction u/s. 10B - AO reduced the expenses from export turnover only and not reduced the same from total turnover - HELD THAT:- By now, this is settled position of law as per these two judgments cited before us being the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] and case of CIT vs. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] that total turnover is sum total of export turnover and domestic turnover and therefore, if an amount is reduced from export turnover then the total turnover also goes down by the same amount automatically. Respectfully following these two judgments, we direct the AO to decide the issue afresh regarding allowability of deduction to assessee u/s. 10B. Disallowing of purchase of software - Nature of expenses - revenue or capital expenditure - HELD THAT:- This issue is to be decided against assessee relying on decision in the case of WIPRO LTD. [2010 (8) TMI 1053 - KARNATAKA HIGH COURT] Disallowance u/s. 37(1) - purchase of bearing - capital expenditure - HELD THAT:- In respect of disallowance out of purchase of ball bearing assembly of ₹ 13,28,603/- this was the submission of assessee before DRP that the expenditure was disallowed without giving assessee an opportunity of being heard. As per the direction of DRP also, it is seen that the direction of DRP is very cryptic without any reasoning. Under these facts, we feel it proper to restore this matter back to the file of DRP for fresh decision by way of a speaking and reasoned order after providing adequate opportunity of being heard to both sides. This ground is allowed for statistical purposes. Expenditure towards Repairs and Maintenance charges - revenue or capital expenditure - HELD THAT:- Repair expenditure were incurred to preserve and maintain an already existing asset, in the course of such repairs, if they have upgraded the facilities to international standards, then that would not constitute a new asset and in the present case, in the absence of bills, we cannot examine the exact nature and hence, we restore this matter back to the file of AO for fresh decision after examining the facts in the light of this judgment of Hon'ble Karnataka High Court in M/S. MAC CHARLES (INDIA) LIMITED [2015 (1) TMI 476 - KARNATAKA HIGH COURT] Assessee is withdrawing all the grounds in respect of TP issues because the TP issue has been resolved as per MAP resolution and only the remaining grounds in respect of corporate tax issue should be decided by the Tribunal. TDS u/s 194C/194I/194J - Disallowance in respect of broadband connectivity charges u/s. 40(a)(ia) - no TDS was deducted by assessee - HELD THAT:- AO has invoked the provisions of section 194C of IT Act although not so stated by AO specifically in the assessment order. As per CIT(A) also, TDS was to be deducted by assessee u/s. 194C of IT Act. As per the Tribunal order DESTIMONEY ENTERPRISES LIMITED (FORMERLY KNOWN AS DESTIMONEY ENTERPRISES PVT LTD.) [2017 (9) TMI 293 - ITAT MUMBAI] cited by assessee, we find that specific finding has been given by the Tribunal in this case that for the payment for internet connection charges, neither section 194C is applicable nor section 194-I nor 194-J. Learned DR of the revenue could not point out any difference in facts in the present case and in the case of Destimony Enterprises Limited vs. ITO (TDS) (Supra). Hence, respectfully following this Tribunal order, we hold that the disallowance made by the AO in the present case u/s. 40(a)(ia) is not justified - Decided in favour of assessee
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