Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

The Commissioner of Income-Tax, The Asst. Commissioner of Income-Tax, Queens Road, Bangalore Versus M/s KSHEMA TECHNOLOGIES LTD.

Computation of deduction under section 10A - Tribunal held that expenses incurred in foreign currency for providing software development services outside India should be excluded from the export turnover for the purpose of computation of deduction U/s. 10A - Held that:- An identical issue relating to section 80HHE of the Act was considered by this court in the case of 'THE COMMISSIONER OF INCOME TAX & ANOTHER v. MOTOR INDUSTRIES CO., LTD., [2015 (7) TMI 876 - KARNATAKA HIGH COURT ] and this cour .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e expenditure incurred in the development or production of computer software though is in the nature of technical services, is not so, for the purposes of the Act and the said expenditure cannot be excluded in computing export turnover. Thus, we are of the view that the said Judgment is squarely applicable to the facts of the present case. Accordingly, we answer the first question in favour of the assessee and against the revenue.

Exchange fluctuation loss - Tribunal held that exchang .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

provisions of law as enunciated in the case of Tata Elxsi Limited [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] - Decided in favour of the assessee and against the revenue - ITA No. 703/2009 - Dated:- 8-1-2016 - N. K. Patil And S. Sujatha, JJ. For the Appellant : Sri K.V. Aravind, Adv For the Respondent : Sri. T. Suryanarayana, Adv. and M/s. King and Partridge, Adv JUDGMENT This appeal is directed against the order passed by the ITAT, Bangalore in ITA No.620/Bang/2008 dated 29.05.2009, relating to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rnover while computing deductions under section 10A of the Act. It is further held that the exchange fluctuation loss of ₹ 74,25,340/- should not be considered for reduction from the total turnover for the purpose of computation of deduction under section 10A of the Act. On appeal, the Appellate Commissioner upheld the finding of the Assessing Officer. On further appeal, the Tribunal reversing the orders of the Authorities, held that expenses incurred in foreign currency for providing soft .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

following substantial questions of law. "[i] Whether the Tribunal was correct in holding that expenses incurred in foreign currency for providing software development services outside India of ₹ 17,80,68,049/- should be excluded from the export turnover for the purpose of computation of deduction U/s. 10A of the Act? [ii] Whether the Tribunal was correct in holding that the exchange fluctuation loss of ₹ 74,25,340/- should be reduced from the total turnover for the purpose of co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

0A of the Act, as the services rendered by the assessee relating to the software development has to be construed as technical service, excluded from the export turnover in terms of Explanation (2)(iv) of section 10A of the Act. 6. Secondly, it is contended that the exchange fluctuation loss of ₹ 74,25,340/- should be reduced from the total turnover for the purpose of computation of deduction under section 10A of the Act, placing reliance on sub-section [4] of section 10A of the Act. 7. In .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

service. It is contended that though the Assessing Officer has arrived at a conclusion that the business of the assessee is to develop the software, however, while considering the question whether the expenses incurred in foreign exchange by the assessee is an integral part of the development of computer software or towards rendering technical services, concluded that the expenditure incurred in the foreign currency is for providing technical services outside India. 9. It is further contended th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

allowed the claim of deduction made by the assessee, directed the Assessing Officer not to exclude expenses incurred in foreign currency for providing software development outside India from the export turnover. This Judgment relied on by the Tribunal is confirmed by this court in the case of 'THE COMMISSIONER OF INCOME TAX AND ANOTHER v. M/S. MPHASIS LIMITED' [ITA No.1075/2008 connected with ITA No.196/2009 - DD 1.8.2014]. 10. It is also contended that the second question raised in this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssment order, the role of the assessee is of developer of software and not a consultant to any project. It is also categorically held by the assessing authority that the purpose of business of the assessee is to develop the software and in such process, expenditure is incurred in foreign currency to provide technical services outside India. Having held so, the assessing authority proceeded to conclude that the nature of expenditure and the nature of business are two different and distinct concep .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Act means 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. What is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

India. Explanation (3) inserted by Finance Act, 2001 with effect from 1.4.2001 explains that the profits and gains derived from on site development of computer software including services for development of software, outside India shall be deemed to be the profits and gains derived from the export of computer software outside India. Thus, it is clarified by the legislature by inserting explanation (3) to section 10A that the profits and gains derived from on site development of computer software .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

R v. MOTOR INDUSTRIES CO., LTD., [in ITA No.776/2007 and connected matters DD 13.6.2014] and this court has held that though the services rendered in deputing the software engineers abroad who among other things have to do testing, installation and monitoring of software supplied to the client, appears to be technical in nature, it does not fall within the clause of providing technical service outside India in connection with the development or production of computer software and accordingly suc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

venue. This court has held that the expenditure incurred in the development or production of computer software though is in the nature of technical services, is not so, for the purposes of the Act and the said expenditure cannot be excluded in computing export turnover. Thus, we are of the view that the said Judgment is squarely applicable to the facts of the present case. Accordingly, we answer the first question in favour of the assessee and against the revenue. 15. As regards question No.2, S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

liance on the Judgment of the Apex Court in the case of Punjab Stainless Steel Industries [supra] to contend that total turnover is the aggregate amount for which sales are effected by the company, referring to the guide to the Company Audit issued by the Institute of Chartered Accountants of India in the year 1980, while discussing sales. The learned counsel contended that the exchange fluctuation loss of ₹ 74,25,340/- should be reduced from the total turnover while computing deduction un .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Notification: Exempt certain supplies to NPCIL.

Notification: Seeks to amend notification No. 12/2017-CT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017-CT(R) to reduce CGST rate on specified supplies of Works Contract Services.

Forum: 3B mistake

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Manpower Service provider

Forum: Construction of single unit bungalow

Forum: Duty Drawback & Input Credit - under GST

Article: SIMPLIFIED E-WAY BILL UNDER GST

Article: SERVICES UNDER REVERSE CHARGE UNDER GST REGIME

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex — Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports – Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

Highlight: Cenvat credit availed on Club Membership for the Director is not admissible as it cannot be said to be remotely connected with the activity of manufacture

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Jaitley asks biz not to wait till last day to file GST returns

Circular: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg.

Article: 20 Things You must know about E Way Bills in GST Law

Article: ‘DUTY DRAWBACK’ CANNOT BE EQUATED WITH ‘REBATE OF DUTY’

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version