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2016 (10) TMI 255 - AT - Income TaxTelecommunication expenses, insurance charges, personnel expenses, professional expenses, branch office expenses and other expenses incurred in foreign exchange - exclusion from the export turnover for the purpose of computing deduction under Section 10B - Held that:- In the instant case, the order for software and hardware are placed separately, though in the same order, for different costs. The sale invoice of software and hardware was also raised separately on different dates. The mode of payment is also different for software and hardware. Moreover, the order was not placed for supply of particular hardware and software only. The order was placed for the supply of software as well as hardware and nothing has been established on record that the said software cannot be used without hardware. In light of these facts, we are of the considered opinion that sale of hardware cannot be a part of software exported by the assessee. Thus, we have no hesitation in holding that sale of hardware cannot be a part of export turnover. So far as the other aspect is concerned, we are of the view that the Tribunal has already taken a view in the earlier order that once a sale of particular item is not considered to be part of export turnover, it cannot be considered as part of total turnover in light of the decision of Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT ) and the decision of the Special Bench in the case of ITO v. Sak Soft Ltd. [2009 (3) TMI 243 - ITAT MADRAS-D] in which it has been held that whatever has been excluded from the export turnover had to be excluded from the total turnover also, since total turnover includes export turnover as well. In light of these findings, we uphold the order of the CIT(Appeals) that sale of hardware component would be excluded from the export turnover and for the recomputation of deduction u/s. 10A, the matter is restored to the Assessing Officer in the terms indicated above. - Decided partly in favour of assessee.
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