TMI Blog2009 (7) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeds was yet to be received by the assessee. The revision u/s 263 is not like the reopening of the assessment where once the assessment is reopened, entire assessment is open before the AO to be reconsidered in accordance with law. In the revision proceedings, the CIT cannot travel beyond the reasons given by him for revision in the show-cause notice. Therefore, we hold that the revision on the ground that part of the sale proceeds is yet to be received by the assessee is not tenable. We find that section 10A is a special provision relating to newly established undertaking in trading zones and the clause ( iv ) of Explanation ( 2 ) of section 10A defines the export turnover, according to which, it is the consideration in respect of the export by the undertaking articles or things or computer software received in or brought into India by the assessee in convertible foreign exchange in accordance with sub-section (3), i.e., within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and it does not include freight, telecommunication charges or insurance charges attributable to the deliv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the appellant had two software undertakings and the figures considered by the ld. CIT were in respect of only one undertaking. 6.The ld. CIT erred in holding that the Export Sales as reflected in STPI return were not reconciled by the Assessing Officer while framing the Assessment Order, since the complete details were called for and furnished to the Assessing Officer during the course of the assessment proceedings. 7.The ld. CIT erred in holding that the Assessing Officer had not examined the genuineness of the quantum of Export Turnover for the purposes of computing the deduction under section 10A of the Act. 8.The ld. CIT erred in holding that the aggregate expenses in foreign currency were to be entirely reduced from the Export Turnover for the purposes of computing the deduction under section 10A of the Act. 9.The ld. CIT erred in holding that the aggregate expenses in foreign currency were to be reduced only from the Export Turnover and not the Total Turnover for the purposes of computing the deduction under section 10A of the Act, and in holding that the provisions of section 80HHE of the Act could not be relied upon for defining the term Total Turnover for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10A of the Income-tax Act. In response to the same, the assessee submitted its reply dated 15-1-2008 stating that section 10A of the Act provides for the deduction of such profits and gains as are derived by an undertaking from the export of computer software for a period of 10 consecutive years, beginning with the assessment year relevant to the previous year in which undertaking begins to manufacture or produce computer software and this deduction is to be allowed from the total income of the eligible undertakings of the assessee. It was submitted that the clause IV of Explanation 2 to section 10A of the Act has defined the term "export turnover" to mean the consideration in respect of export by the undertaking of articles or things or computer software received in, or brought into India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India. It was submitted that the expenses incurred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption has been wrongly given to the assessee. As regards the assumption of jurisdiction under section 263 of the Act, the ld. counsel for the assessee put forward the following pro-positions : ( i )When two views are possible and the Assessing Officer takes one view or two methods are possible and the Assessing Officer follows the one method, the order of the Assessing Officer cannot be said to be erroneous and prejudicial to the interest of the revenue. ( ii )Without prejudice to the aforesaid proposition, the export turnover is not required to be reduced by any expenditure in foreign currency or any expenditure incurred on freight, telecommunication or insurance for the purpose of computing the deduction under section 10A of the Act. ( iii )Without prejudice to the aforesaid proposition even if any expenditure in foreign currency or any expenditure incurred on freight, telecommunication or insurance is to be reduced, the same is to be reduced from the export turnover and the total turnover for the purpose of computing the deductions under section 10A of the Income-tax Act. 5. As regards proposition No. 1, the ld. counsel for the assessee submitted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee drew our particular attention to the definition of export turnover given in clause ( iv ) of sub-section (2) of section 10A of the Income-tax Act and submitted that the expenditure incurred by the assessee in foreign currency were as follows: ( i ) Software packages and tools - Rs. 58,89,375 ( ii ) Travelling expenses - Rs. 1,10,35,099 ( iii ) Professional fees - Rs. 18,72,157 ( iv ) Sales marketing expenses - Rs. 7,70,56,613 ( v ) Exhibition expenses - Rs. 14,48,572 ( vi ) Royalty - Rs. 51,41,867 ( vii ) Other expenses (net of reimbursement include foreign office expenses) - Rs. 1,67,70,596 zRs. 11,92,14,246 7.1 He submitted that the nature of the above expenditure clearly shows that none of these are for freight, telecommunication charges or insu-rance charges which are attributable to the delivery of the computer software outside India nor are they incurred for providing technical services outside India. In such a case according to him, they cannot be excluded from the export turnover fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with law. In the revision proceedings, the CIT cannot travel beyond the reasons given by him for revision in the show-cause notice. Therefore, we hold that the revision on the ground that part of the sale proceeds is yet to be received by the assessee is not tenable. As regards the ground on which the revision was sought to be made, we find that section 10A is a special provision relating to newly established undertaking in trading zones and the clause ( iv ) of Explanation ( 2 ) of section 10A defines the export turnover, according to which, it is the consideration in respect of the export by the undertaking articles or things or computer software received in or brought into India by the assessee in convertible foreign exchange in accordance with sub-section (3), i.e., within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and it does not include freight, telecommunication charges or insurance charges attributable to the delivery of articles or things or computer software outside India. From the facts of the case it can be seen that the expenditure sought to be reduced from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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