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2023 (3) TMI 1341 - AT - Income TaxAllowability of Provision for discount - whether allowable as expense in the current year? - as contended that said provision for discount was in respect of crystallised liability and the same is to be allowed as deduction since the assessee was consistently following mercantile system of accounting - HELD THAT:- Tribunal for AY 2009-10 had accepted the claim of the assessee for provision for discount as an allowable expenditure Further the Department has filed appeal against the said order of the Tribunal for AY 2009-10 before the Hon'ble High Court of Karnataka [2017 (8) TMI 1699 - KARNATAKA HIGH COURT] wherein the issue relating to provision for discount was not assailed. In the light of the orders of the Tribunal in assessee’s own case for AY 2004-05 and AY 2009-10 which is identical to the facts of the instant case, we reject the grounds of appeal raised by the Revenue. Exclusion of insurance charges from the export turnover for computing 10AA deduction - CIT(A) directed the AO to exclude from export turnover as well as from the total turnover, the insurance charges while computing deduction under Section 10AA - HELD THAT:- The insurance charges incurred by the assessee are not attributable to delivery/export of computer software outside India. AO and CIT(A) have failed to appreciate that the assessee is engaged in export of computer software which are developed by the assessee in India. The said software is exported through electronic media, i.e. internet/ digital media with click of a button and same are not physically exported to get it insured. Thus the question of insuring the software exported by assessee does not arise. Such being the case it cannot be said that insurance charges are included in export turnover. The assessee has not charged its customers separately in respect of the insurance charges nor has the assessee included the same in the export turnover nor recovered it from its customers. Export turnover of the assessee does not include the aforesaid expenses. Such being the case, the question of reducing the aforesaid expenditure from the export turnover does not arise. As decided in Tata Elxsi vs. ACIT [2015 (3) TMI 1220 - ITAT BANGALORE] if the expenditure incurred on telecommunication charges and insurance charges were not recovered and not included in the export turnover, the Assessing Officer shall not reduce the same from the export turnover We are of the view that there is no necessity to exclude from the export turnover the insurance charges. Therefore, we direct the AO to recompute the deduction under Section 10AA of the Act, keeping in view our aforesaid direction. Appeal filed by the Revenue dismissed.
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