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2016 (2) TMI 43 - HC - Income TaxComputation of deduction under section 10A - Tribunal held that expenses incurred in foreign currency for providing software development services outside India should be excluded from the export turnover for the purpose of computation of deduction U/s. 10A - Held that:- An identical issue relating to section 80HHE of the Act was considered by this court in the case of 'THE COMMISSIONER OF INCOME TAX & ANOTHER v. MOTOR INDUSTRIES CO., LTD., [2015 (7) TMI 876 - KARNATAKA HIGH COURT ] and this court has held that though the services rendered in deputing the software engineers abroad who among other things have to do testing, installation and monitoring of software supplied to the client, appears to be technical in nature, it does not fall within the clause of providing technical service outside India in connection with the development or production of computer software and accordingly such expenditure cannot be excluded in computing export turnover. This court has held that the expenditure incurred in the development or production of computer software though is in the nature of technical services, is not so, for the purposes of the Act and the said expenditure cannot be excluded in computing export turnover. Thus, we are of the view that the said Judgment is squarely applicable to the facts of the present case. Accordingly, we answer the first question in favour of the assessee and against the revenue. Exchange fluctuation loss - Tribunal held that exchange fluctuation loss should be reduced from the total turnover for the purpose of computation of deduction U/s. 10A - Held that:- section 10A of the Act is a beneficial provision. The purpose of section 10A of the Act is also to bring more foreign exchange and to encourage export and as the Government decides to give some benefit to such undertaking which is helping the nation in bringing foreign exchange, the revenue should encourage such traders by giving more benefits as contemplated under the provisions of law as enunciated in the case of Tata Elxsi Limited [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] - Decided in favour of the assessee and against the revenue
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