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2014 (8) TMI 690 - HC - Income TaxComputation of deduction u/s 10B - Foreign currency provided for software development services outside India Held that:- The consideration in respect of computer software received in or brought into India by the assessee in convertible foreign exchange is deducted from the profits of the business - the assessee is not liable to pay any income tax on consideration received from export of computer software - the proceeds on the assumption that the assessee is a company engaged in rendering technical services outside India in connection with production of software - the expenditure incurred in foreign exchange in providing technical services outside India of ₹ 62.7 lakhs was excluded in computing the export turnover and total turnover for arriving at deduction u/s 80HHE of the Act - The software Engineers deputed abroad who among other things have to do testing, installation and monitoring of software supplied to the client - the expenditure cannot be excluded in computing export turn over Decided against Revenue. Computation of deduction u/s 10B - Expenses in foreign currency of telecommunication expenses Held that:- Following the decision in Commissioner of Income-Tax And Another Vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] - if the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator - The reason being the total turnover includes export turnover - The components of the export turnover in the numerator and the denominator cannot be different - there is no definition of the term 'total turnover' in Section 10-A, there is nothing in the said Section to mandate that, what is excluded from the numerator that is export turnover would nevertheless form part of the denominator - If what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible - If that were the intention of the legislature, they would have expressly stated so - If they have not chosen to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the legislature to the export turnover is to be respected and given effect to, while interpreting the total turnover which is inclusive of the export turnover Decided against Revenue.
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