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2021 (6) TMI 987 - AT - Income TaxDeduction u/s 10A - whether the expenditure incurred in foreign currency is required to be excluded from the export turnover or not when the assessee is exporting only software? - HELD THAT:- As decided in own case [2014 (1) TMI 1751 - ITAT BANGALORE] assessee is in the business of exporting computer software and therefore the expenses incurred in foreign exchange cannot be said to be one incurred by the assessee in connection with providing technical services outside India. The assessee does not claim exclusion of telecommunication charges or insurance attributable to the delivery of software outside India. The claim for exclusion from the export turnover is made by the assessee only in respect of expenses incurred in foreign currency in providing technical services outside India. We however do not have the break-up of the item of expenditure incurred in foreign currency outside India. A copy of the agreement between the Assessee and Robert Bosch, Germany titled software project agreement (SPA) has been filed before us. We do not know as to whether the entire export turnover is in relation to this client alone or there were other clients for whom the Assessee rendered computer software development services. A perusal of the SPA filed before us shows that the Assessee agreed to carry out software development work for Robert Bosch Germany at Germany also. The terms of the agreement for rendering services on-site at clauses-5.2 to 5.2.6 of the agreement does not involve rendering of any technical services. The question as to whether the entire expenditure incurred in foreign exchange outside India relates to providing technical services outside India cannot be decided in the absence of the required information as stated above. If the claim of the Assessee that the entire expenditure incurred in foreign exchange outside India does not relate to providing technical services outside India, then the same cannot be excluded from the export turnover. Whether the amount deducted from export turnover is also required to be deducted from total turnover or not? - Since this issue is related to computation of deduction u/s 10A, this issue also restored to the file of the Ld. CIT(A) with the direction to follow the decision rendered in the case of Tata Elixi Ltd. [2016 (3) TMI 460 - KARNATAKA HIGH COURT] and also decision rendered in the case of HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT]. Deduction of unrealized from the export proceeds, while computing deduction u/s 10A on the ground that the same has not been realised within a period of 6 months - Ld. A.R. invited our attention to Master Circular No.9/2008-09 dated 1st July, 2008 issued by RBI. The Ld. A.R. submitted that the RBI has granted “general permission” to realize the export proceeds within a period of 12 months from the date of export on or after 1st September, 2004. We notice that the Ld. CIT(A) has not adjudicated this aspect. Accordingly, we restore this issue also to his file for examining the same afresh by considering the circular issued by RBI. Claim of foreign tax credit - Since this is a legal ground and all facts are available on record, we admit the same. Since this issue requires examination at the end of AO, we restore this issue to the file of the A.O. for examining the claim of the assessee in accordance with law.
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