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2017 (1) TMI 1739 - AT - Income TaxDeduction allowable u/s 10A - treatment to expenditure reduced from the export turnover - HELD THAT:- Following the judgment in the case of M/s Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein as held by that the 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 automatically goes down by the same amount. We direct the AO that the expenses he has reduced from the export turnover should also be reduced from the total turnover for the purpose of computation of deduction allowable u/s 10A of the Act. These grounds are allowed in this manner. Deduction u/s 10A - computed after setting off losses incurred by certain undertakings as against computing relief for each undertaking separately - HELD THAT:- Claim allowed by respectfully following the judgment of the Hon’ble High Court rendered in the case of M/s Yokogawa India Ltd [2016 (12) TMI 881 - SUPREME COURT] which has been approved by the Hon’ble Apex Court. Whether interest income is assessed under the head “Income from business” or “Income from other sources” is not having any impact on the tax liability of the assessee in the present year, we hold that this issue is only of academic interest in the present year and we do not enter into this aspect in the present year and the same is left open for a decision in a later year where it will have an impact on the tax liability of the assessee. Allowability of expenditure on purchase of computer software along with related hardware - HELD THAT:- Expenditure incurred on purchase of computer software along with related hardware is not allowable as revenue expenditure u/s 37 and only depreciation thereon is allowable as per the applicable rate but the income of the assessee should be considered after making this disallowance for the purpose of computing deduction allowable to the assessee u/s 10A of the IT Act because in our considered opinion, if an amount is not allowable on the basis of this dispute that it is capital expenditure and not revenue expenditure then it has to be accepted that the actual business income was the income assessed after making such disallowance and the same should be considered for the purpose of computing the deduction allowable u/s 10A of the IT Act, 1961. Foreign tax credit - HELD THAT:- We restore the matter regarding granting of foreign tax credit to the assessee to the file of the AO for a fresh decision with the direction that if it is established by the assessee that an income was taxed in a foreign country and the same was also taxed in India and on such income, no exemption was claimed by the assessee in India then foreign tax paid in a foreign country should be considered for foreign tax credit as per law. The AO should pass necessary order as per law on this aspect after providing adequate opportunity of being heard to the assessee. The issue involved in ground no. 15 in respect of chargeability of interest is consequential in nature for which no separate adjudication is called for
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