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2020 (6) TMI 167 - ITAT DELHIComputing allowable deduction u/s 10A - CIT(A) directing the AO to exclude the expenses incurred in foreign currency outside India, from total turnover of the assessee - HELD THAT:- As decided in TATA ELXSI LTD. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] total turnover is sum total of domestic turnover and export turnover. Therefore, if an amount is reduced from export turnover, then total turnover also goes down by the same amount automatically. In view of this, we find that the direction of the learned CIT(A), we decline to interfere in the order of CIT(A) on this issue. Reducing export sales on the ground of non-realization for the purposes of computing deduction u/s 10A - HELD THAT:- We find that this issue was discussed by learned CIT(A) in para Nos. 3.3 to 3.5 and in para 3.5, a specific finding was given by learned CIT(A) that the assessee has himself admitted that it could not realize an amount of ₹ 20.23 Crores out of total export sales of ₹ 1880.48 Crores. Before us, learned AR of the assessee could not point out any mistake in this categorical finding of CIT (A) on the basis of assessee’s own submissions and therefore, the facts of the present case are different because the export proceeds were not brought into India even after lapse of the prescribed time and hence, this tribunal order and in turn the judgment of Hon’ble Karnataka High Court is not applicable in the present case. We, therefore, decline to interfere in the order of CIT (A) on this issue. Ground No.1 is rejected. Expenditure incurred in foreign currency should not be reduced from export turnover Eligible business profits for the purposes of computing deduction u/s 10A - Exclusion amount as profit from trading of third-party software - Appellant had done value addition to the third-party software before supplying it to its customers, thereby making it eligible for deduction u/s 10A - HELD THAT:- We find that in this judgment in the case of CIT Vs. Hewlett Packard Global Soft Ltd. [2017 (11) TMI 205 - KARNATAKA HIGH COURT], the assessee was 100% EOU. We do not know whether in the present case also, the assessee is 100% EOU or not. In para No.2 of the Assessment Order, it is noted by the AO that the assessee is engaged in the business of developing Software Products for Billing, Wireless and Internet Space and it renders services to its clients both for maintenance as well as core development. Hence, the relevant facts are not on record as to whether the assessee is 100% EOU or not. We restore this matter back to the file of CIT (A) for fresh decision. TDS u/s 195 - HELD THAT:- Commission payments made by the assessee to non residents cannot be treated as income deemed to accrue or arise in India and therefore, the provisions of section 195 are not applicable in the case in hand.
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