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2015 (10) TMI 316 - ITAT CHENNAI

2015 (10) TMI 316 - ITAT CHENNAI - [2015] 43 ITR (Trib) 436 (ITAT [Chen]) - Computation of deduction u/s 10A - exclusion of 50% of expenses incurred on leased lines communication which is treated as expenses incurred for delivery of computer software outside India) from the export turnover - Held that:- Freight, telecommunication charges or insurance attributable to the delivery of articles or things or computer software outside India or expenses incurred in foreign exchange in providing the tec .....

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either to include such expenses in the invoice on adhoc basis or by specifically stating it separately. By these gimmicks of the assessee, the provisions of the income-tax Act cannot be treated differently in both the situations. Therefore, we agree with the view of the Ld. Assessing Officer that the expenses incurred by the assessee towards delivery of computer software outside India has to be excluded from the export turnover, though it is not separately stated in the invoice. However, we als .....

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on for the payment to LIC on account of Gratuity Fund u/s.37 of the Act is appropriate as the payment made to the Gratuity Fund maintained with LIC where the appellant has no control over the irrevocable trust created exclusively for the benefit of the employees deduction shall be allowed. Therefore, we hereby confirm the order of the Ld. CIT (A) on this issue. - Decided in favour of assessee.

Disallowance of 1/3rd of expenditure incurred towards mediclaim for dependent family members .....

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herefore claim of the assessee is justified for granting deduction for these expenses incurred by the assessee. - Decided in favour of the assessee. - I.T.A.Nos.1654,1703,1704/Mds./2014, C.O Nos.69,70,71/Mds./2014 - Dated:- 4-9-2015 - SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER For The Appellant : Mr.P.B.Sekaran, CIT, D.R For The Respondent : Mr.Sriram Seshadri,Advocate ORDER PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: These three appeals are filed by the Re .....

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in all the three assessment years are concised herein below for adjudication. For A.Y 2005-06 2.1.1. The Ld. CIT(A) had erred in deleting the addition made by the Ld. A.O which has resulted due to the exclusion of ₹ 47,46,818/- (being 50% of expenses incurred on leased lines communication which is treated as expenses incurred for delivery of computer software outside India) from the export turnover by the Ld. Assessing Officer for the purpose of computing deduction U/s.10A of the Act. 2.1. .....

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has resulted due to the exclusion of ₹ 6,75,61,477/- (being 50% of expenses incurred on leased lines communication which is treated as expenses incurred for delivery of computer software outside India) from the export turnover by the Ld. Assessing Officer for the purpose of computing deduction U/s.10A of the Act. 2.3 Cross Objections The cross Objections raised by the assessee for all the three assessment years are concised herein below for adjudication. 2.3.1 Identical Cross Objections fo .....

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ice and also failed to deduct the same from the total turnover. 3. The brief facts of the case are that the assessee is engaged in the business of providing services relating to development and maintenance of telecom software solutions and information technology enable services, filed its return of income on 29.10.2005, 06.10.2006 & 29.10.2007 admitting its total income as ₹ 22,58,930/-, ₹ 27,81,140/- & ₹ 3,798,806/- for assessment years 2005-06, 2006-07 & 2007-08 r .....

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delivery of computer software outside India) from the export turnover by the Ld. Assessing Officer for the purpose of computing deduction U/s.10A of the Act. During the course of assessment proceedings, the Ld. A.O noticed that the assessee had debited certain amount as telecom expenses. It was further observed that out of the above afore-stated expenses 50% of the expenses was incurred towards leased line communications for delivery of computer software outside India. When the Ld. A.O pointed .....

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lowing conclusions:- Analysis of the claim of the assessee On careful consideration of the factual and legal aspects of the case and the principles of interpretation of statutes narrated above, I am of the opinion that section 1 0A does not provide for excluding the expenses incurred in foreign exchange from the total turnover. Whenever, a term is not defined in the section, only its plain meaning should be considered. A plain meaning of total turnover does not exclude the expenses irrespective .....

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d circumstances of the case, it is clear that the of export turnover is different from total turnover. The legislature intentionally has not defined the total turnover in the Section I0A of the Income Tax Act. Hence, the assessee s contention of reduction of telecommunication expenses from both export turnover and total turnover is not accepted and the deduction u/s I OA will be calculated will be calculate as per Annexure - I . Based on the above facts ₹ 47,46,81 8/- is being reduced from .....

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was followed by the Hon ble jurisdictional ITAT in Cognizant Technology Solutions and Inautix Technologies India (P) Ltd. referred to above, respectfully relying on the same, the AO is directed to delete the addition. The ground is allowed. 4.3 Ld. D.R argued in support of the order of the Ld. Assessing Officer while as the Ld. A.R. relied on the order of the Ld. CIT (A) and the decisions cited by the Ld. CIT (A). 4.4. We have heard both the parties and carefully perused the materials available .....

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ide India or expenses, if any, incurred in foreign exchange in providing the technical services outside India; From the above it is evident that freight, telecommunication charges or insurance attributable to the delivery of articles or things or computer software outside India or expenses incurred in foreign exchange in providing the technical services outside India has to be ironed out from the export turnover. In the case of the assessee, though these expenses are not separately stated and cl .....

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e income-tax Act cannot be treated differently in both the situations. Therefore, we agree with the view of the Ld. Assessing Officer that the expenses incurred by the assessee towards delivery of computer software outside India has to be excluded from the export turnover, though it is not separately stated in the invoice. However, we also hereby hold by relying on the decision of Special Bench of the Tribunal in ITO Vs. Sak Soft Ltd., reported in 313 ITR (AT) 353 (Chennai)(SB) that what is excl .....

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for the approval of the Gratuity Fund was filed before the income tax department as per the provisions of the Act and the same was in the process of getting approval. Since the approval was not granted when the payment was made, the Ld. Assessing Officer disallowed the deduction of the same by invoking the provisions of section 36(1)(v) of the Act and added the same to the income of the assessee. On appeal, the Ld. CIT (A) relying on the decision of the Hon ble Apex Court in the case of Texttool .....

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tion shall be allowed. Therefore, we hereby confirm the order of the Ld. CIT (A) on this issue. Cross objections: 6.1. Ground No.1- Disallowing the 1/3rd of expenditure incurred towards mediclaim for dependent family members of employees. (A.Ys: 2005-06, 2006-07 & 2007-08) The Ld. Assessing Officer observed that the assessee had claimed ₹ 37,02,636/- as deduction U/s.37 of the Act towards payment made to Group mediclaim. However, the Ld. Assessing Officer opined that by virtue of secti .....

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