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2016 (5) TMI 211 - HC - Income TaxDeduction u/s 10A - ITAT treating expenses incurred in foreign currency to be taken along with total turnover of the assessee - Held that:- We have noticed that on appeal by the Revenue before the Appellate Tribunal, the Tribunal following the judgment of an identical case, wrongly mentioned as assessee's case as submitted by both the parties, confirmed the order of the Appellate Commissioner treating expenses incurred in foreign currency to be taken along with total turnover of the assessee. We find that the Tribunal's finding is not based on any examination of available and relevant material to come to a conclusion as to whether the activity related to the computer software as defined under Explanation 2 to section 10A or involving technical services which has to be excluded from the export turnover as per Explanation 4 to section 10A, more particularly, when the assessee had reduced the said expenditure incurred in foreign currency from the export turnover and total turnover at the time of filing the returns and thereafter has shifted to a different stance before the appellate authority, that the said services were integral part of development of computer software. Even in the order of the Appellate Commissioner, we do not see the details of remand reports said to have been submitted by the Assessing Officer and any discussion regarding any material or any agreement copies to establish the factual situation and the activities of the assessee. The Tribunal without examining any commensurate material, placing reliance on the judgment of the Tribunal dated May 30, 2008, allowed the relief claimed by the assessee. Given the circumstances, the said finding of the Tribunal is not based on any relevant material. We are therefore of the opinion that it would be proper to remand the matter to the Tribunal to examine the material on record and to record a finding as to the nature of the activity, keeping in view the settled legal position as per the judgment of this court in Motor Industries Company Limited's case (2015 (7) TMI 876 - KARNATAKA HIGH COURT) and Mphasis Limited's case (2014 (8) TMI 690 - ANDHRA PRADESH HIGH COURT). It is also made clear that what is required to be excluded in the export turnover are only freight, telecommunication charges or insurance attributable to the delivery of computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India which cannot be confused with the services rendered for the development of computer software, an integral part of export turnover of computer software.
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