TMI Blog2017 (4) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... n of certain expenses as claimed by the assessee. Disallowance made under Section 14A - Held that:- It is apparent that as far as the interest expenditure is concerned there is a reduction in the investment during the year under consideration and therefore no interest bearing fund was used for investment during the year under consideration. Even otherwise the Assessing Officer has not given a finding that the assessee has used borrowed fund for the purpose of making investment. Further it is not dear that in which year and how much of investment was made. Therefore having regard to these facts when there is a reduction in the investment during the year under consideration then without giving the specific finding of using the borrowed fund as well as no disallowance in the year of investment on account of interest expenditure, we are of the view that the Assessing Officer is not justified in making the disallowance on account of interest expenditure under Section 14A of the Act. As regards the disallowance on account of indirect administrative expenditure there is no dispute that there is a substantial movement in the investment portfolio of the assessee which consist of mutua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s very much available to the assessee for utilization for business purpose of the AE then this transaction of payment of money to the AE against which no shares were allotted till the end of the financial year relevant to the assessment year under consideration will constitute an international transaction as per the provisions of Section 92B of the Act as it has a direct bearing on the profit and loss as well as the assets of the enterprises. Further as per the Explanation to Section 92B(1) of the Act till the date of allotment it will constitute as capital financing/advance to the AE. We find substance so far as the applicability of LIBOR because the remittance has been made in foreign currency and therefore it is appropriate to apply the LIBOR rate for determining the arm's length interest. Further the computation of the interest has to be from the date of remittance till the end of the financial year. Accordingly, we direct the TPO/A.O. to recompute the arm's length interest in respect of this transaction by taking into consideration LIBOR and the period from the date of remittance till 31.3.2009. As regards allowing the time period of 180 days, since this is not a case of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for relief under section 10A: 3.1 The learned AO and the Hon'ble DRP erred in re-apportioning expenses by not considering the fact that the Appellant had apportioned common expenses incurred involving insurance, miscellaneous expenses, office expenses, printing and stationery, security charges and vehicle maintenance between STPI unit and non-STPI unit. 3.2 The learned AO and the Hon'ble DRP erred in contending that expenses pertaining to membership and subscription, corporate expenses and deduction claimed under section 35D are common expenses required to be apportioned while such expenses were not connected in anyway to STPI unit. Disallowance under section 14A, of the Act read with Rule 8D: 4. The learned AO and the Hon'ble DRP erred in law by disallowing a sum of ₹ 41,94,650/- under section 14A while computing the taxable income under the Act. More specifically the objections are as follows: 4.1 The learned AO and the Hon'ble DRP erred in rejecting the submission of the Appellant that section 14A would not be applicable in its case since it has not incurred any expenditure in relation to exempt income, 4.2 The learned AO and the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate filters for selection of comparable companies thereby making the arm's length price determined by the TPO for the transactions involving provision of software development services as incorrect in law. 9.2 Without prejudice to the above, the learned AO and the Hon'ble DRP erred in confirming the order of the learned TPO that involved selecting companies as comparables even though they are not comparable in respect of the factors of comparability as provided in Rule 10B i.e. functions performed, risks assumed, assets employed, capital size, companies with super normal profits etc. 10. Computation of operating margins of comparables chosen by learned TPO: 10.1 The learned AO/TPO and the Hon'ble DRP erred in not considering the amount of foreign exchange gain/loss and miscellaneous income earned by comparables for computing the operating margins. 10.2 The learned AO and the Hon'ble DRP erred in confirming the order of the TPO without considering the objection raised by the Appellant before the Hon'ble DRP pertaining to erroneous non-consideration of the provision for doubtful debts or advances as operating in nature for the purpose of computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned AO erred in considering the arm's length rate of interest as the SBI Prime Lending rate as per the order of the learned TPO without giving effect to the directions of the Hon'ble DRP wherein the rate of interest is directed to be considered as LIBOR adjusted for risk premium of spread rate and forex cover. 14.2 Without prejudice to the above ground, the learned AO and the Hon'ble DRP also erred in adjusting the LIBOR for risk premium of spread rate by considering the transaction equivalent to BBB rated bonds. 14.3 Without prejudice to the above grounds, the learned AO and the Hon'ble DRP also erred in enhancing the rate of interest 100 basis points as a cover for fluctuation in foreign exchange. 14.4 Without prejudice to the above grounds, the order of the learned AO, based on the directions of the Hon'ble DRP suffers from infirmities in that the Hon'ble DRP has not considered the objections raised by the Appellant with regards to the computation of interest on the aggregate amount of remittance during the year as against TPO's own order stating that the interest should be computed on monthly outstanding balances of such remittances. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;16. The substituted s, 10A continues to remain in Chapter III. It is titled as Incomes which do not form part of the total income . It may be noted that when s. 10A was recast by the Finance Act, 2001 (sic-2000), the Parliament was aware of the character of relief given in Chapter III. Chapter III deals with incomes which do not form part of total income. If the Parliament intended that the relief under s. 10A should be by way of deduction in the normal course of computation of total income, it could have placed the same in Chapter VI-A which houses the sections like 80HHC, 80-IA, etc. The Parliament was aware of the various restricting and limiting provisions like s. 80A and s. 80AB which were in Chapter VI-A which do not appear in Chapter III. The fact that even after its recast, the relief has been retained in Chapter III indicates the intention of Parliament that it is to be regarded as an exemption and not a deduction. The Act of the Parliament in consciously retaining this section in Chapter III indicates its intention that the nature of relief continues to be an exemption. Chapter VII deals with the incomes forming part of the total income on which no income-tax is payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year, sub-s. (2) of s. 32, cl. (ii) of sub-s. (iii), s. 32A cl. (ii) of sub-s. (3) of s. 32A, cl. (ii) of sub-s. (2) of s. 33 and sub-s. (4) of s. 35 of the Act or the second proviso to cl. (ix) of sub-s. (1) of s. 36 shall not be applicable in relation to any such allowance or deduction. Similarly no loss as referred to in sub-s. (1) or in s. 72 or sub-s. (1) or sub-s. (3) of s. 74 insofar as such loss relates to the business of the undertaking was permitted to be carried forward or set off where such loss relates to any of the relevant assessment years. 21. It is in this background the Finance Act, 2003 was introduced by inserting the words the year ending up to the first day of April, 2001 , for that in cls. (1) and (2) of sub-s, (6) restricting the disallowance only up to the first day of April, 2001 and granting the benefit, of those provisions even in respect of units to which ss. 10A and 10B are applicable. The Finance Act, 2003, amended this sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come post tax holiday, it is necessary that the notional computation of business income and the depreciation as per the provisions of the Act should be made for each year of the tax holiday period, While so computing, attention will have to be given to provisions of ss. 70, 71, 72 and s. 32(2). The amount of depreciation and business loss remaining unabsorbed at the end of the tax holiday period should be determined so that the same may be set off against the income post tax holiday period.' 5.4 We further note that this view has been reiterated by the Hon'ble jurisdictional High Court in the case of Aurigene Discovery Technologies Ltd. (supra). A similar view was considered by the co-ordinate bench of this Tribunal in the case M/s. Biocon Ltd. (supra) and held in paras 23 to 26 as under: '23. We have given a very careful consideration to the rival submissions. The issue raised by the assessee in ground No. 21 is identical to the ground raised by the assessee in Biocon (supra). The facts of the case before the Tribunal in the case of Biocon (supra) were that the assessee during the previous year had four units which were entitled to claim deduction u/s. 10B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble Karnataka High Court in the case of CIT v. Himatasingike Seide Ltd., 286 ITR 255 (Kar). In the aforesaid decision, the Hon'ble High Court has taken the view that deduction u/s. 10B has to be allowed after set off of unabsorbed depreciation and unabsorbed investment allowance. The Hon'ble Court took the view that the aforesaid provision was only an exemption provision. The CIT (Appeals) noticed that the aforesaid decision was followed by the ITAT Bangalore Bench in the case of Intelnet Technologies India Pvt. Ltd. v. ITO, ITA No. l021/Bang/2009 dated 12.3.2010. Similar view expressed by the Delhi Bench of the Tribunal in the case of Global Vantage Pvt. Ltd. v. DCIT, 2010 TIOL 24 ITAT (DELHI) was also referred to by the CIT (A). A contrary view was expressed by the Bangalore Bench of the Tribunal in the case of KPIT Cummins Info Systems (Bangalore) Pvt. Ltd. v. ACIT, 120 TO 956. The CIT (A) found that in the case of Global Vantage Pvt. Ltd. (supra) decided by the Delhi Tribunal this decision has been held to be not in tune with the decision of the Hon'ble High Court of Karnataka in the case of Himatasingike Seide Ltd. (supra). The CIT (A) also referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the total income of the Assessee does not mean total income as defined u/s. 2(45) of the Act but that expression means profits and gains of the STP undertaking as understood in its commercial sense or the total income of the STP unit. Thus the view expressed is that income of the STP undertaking gets quarantined and will not be allowed to be set off against loss of either another STP undertaking or a non-STP undertaking. The Hon'ble Court thereafter held that though the expression used in Sec. 10A was Deduction but in effect it was only an exemption section. These conclusions clearly emanate from para 17 of the Hon'ble Court's judgment. 65. The situation with which we are concerned in the present case is a situation where there is positive income of the eligible unit then the same should be allowed deduction u/s. 10B of the Act without setting of the loss of non-eligible unit. The Hon'ble Karnataka High Court in the case of Yokogawa (supra) was concerned with similar situation as set out above. In view of the aforesaid decision of the Hon'ble Karnataka High Court, we are of the view that the claim as made by the Assessee for carry forward of loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10A/10B of the Act and not in respect of brought forward losses and depreciation of other undertakings/non-10A/10B units. S. 10A/10B(6) as amended by the FA 2003 w.r.e.f. 1.4,2001 provides that depreciation and business loss of the eligible unit relating to the AY 2001-02 onwards is eligible for set-off carry forward for set-off against income post tax holiday which means that they need not be so set off as mandated in the decision of the Hon'ble Karnataka High Court in the case of Himatasingike Seide Ltd. (supra). As we have already seen, in Yokogawa India Ltd. 341 ITR 385 (Kar.), it was held that even after s. 10A/10B were converted into a deduction provision w.e.f 1.4.2001, the benefit of relief u/s. 10A/10B is in the nature of exemption with reference to commercial profits and that as the income of the s. 10A unit has to be excluded at source itself before arriving at the gross total income, the question of setting off the loss of the current year's or the brought forward business loss (and unabsorbed depreciation) against the s. 10A profits does not arise. Therefore the decision of the Hon'ble Karnataka High Court in the case of Himatasingike Seide (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d this issue therefore we direct the Assessing Officer to verify the claim of the assessee regarding the double deduction of certain expenses against the profits of the STPI Units. Hence this issue is set aside to the record of the Assessing Officer for limited purpose of verification of the facts of double deduction of certain expenses as claimed by the assessee. 10. Ground No. 4 is regarding disallowance made under Section 14A of the Act. The assessee has earned dividend income of ₹ 1,57,88,043 during the year under consideration. The assessee claimed that it has not incurred any expenses in respect of the dividend income and therefore the question of invoking the provisions of Section 14A of the Act does not arise. The Assessing Officer did not accept this contention of the assessee. The Assessing Officer noted that the assessee has claimed expenses of ₹ 19,57,430 on account of interest of working capital facility. Accordingly, the Assessing Officer has made the disallowance of ₹ 7,98,531 on account of proportionate indirect interest. The Assessing Officer has also made disallowance on account of indirect administrative expenses being 0.5% on average investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer is not justified in making the disallowance on account of interest expenditure under Section 14A of the Act. 14. As regards the disallowance on account of indirect administrative expenditure there is no dispute that there is a substantial movement in the investment portfolio of the assessee which consist of mutual funds, equity shares and inter-corporate deposits. Therefore when the assessee has taken the decision for selling and fresh investment during the year under consideration which involves a high level decision making process then the claim of the that no expenditure has been incurred for earning the dividend income is not acceptable. Accordingly, we uphold the disallowance on account of indirect administrative expenses being 0.5% of the average investment made under Section 14A of the Act. 15. Ground No. 5 is regarding disallowance of deduction in respect of Employees Contribution to PF and ESI. The Assessing Officer has made disallowance of deduction claimed by the assessee under Section 36(1)(vi)(va) r.w.s. 40B(b) with respect to Employees Contribution to PF as well as ESI. The DRP has also confirmed the disallowance proposed by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employee's contribution. Therefore, in law, the payment of contribution by the employer to the fund under the scheme means both employer's contribution and employee's contribution. Whether he deducts the employee's contribution from the salary or not, in law, he is liable to pay the said amount. Therefore, Section 2(24)(x) of the Act makes it clear that the employee's contribution which the employer deducts from his salary before it is paid into the fund, is treated as the income of the employer, and the employer by contributing can get the deduction. That payment must be made within the due date i.e., the due date prescribed under Section 139(1) of the Act. Because it was causing lot of problem as discussed in the judgment of the Apex Court, on a representation made by the industry, subsequent amendment was carried out to mitigate the difficulties caused to the employer under Section 43B of the Act. Though such contributions are not paid within the time prescribed under the relevant Act, if those contributions are paid before the due dated prescribed under Section 139(1) of the Act, the employer shall be entitled to the deductions as provided under Section 36( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or funds on or before the due date mentioned in Explanation to section 36(l)(va), the assessee shall not be entitled to deductions of such amount in computing the income referred to in section 28 of the Act. 9. Sub-section (24) of Section 2 of the IT Act defines income . Clause(x) of sub-section (24) of Section 2 of the IT Act provides that income includes any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of Employees' State-Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees. 10. On the basis of this provision, Mr. Aravind, learned counsel for the revenue, vehemently submitted that the employees' contribution to provident fund is also an income of the employer till he deposits the said amount along with his contribution with the fund, as contemplated under the provisions of Section 36(1)(va) of the IT Act. 11. From bare perusal of this provision, we do find ourselves in agreement with Mr. Aravind, learned counsel for the revenue. But in our opinion, that by itself is not sufficient to hold that the employer is not entitled f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. 15. From bare perusal of this provision, it is clear that under the provision, for IT Act, an extension is given to the employer to make payment of contribution to provident fund or any other fund till the due date applicable for furnishing the return of income under sub-section (1) of section 139 of the IT Act in respect of the previous year in which the liability to pay such sum was incurred and the evidence of such payment is furnished by the assessee along with such return. In short, this provision states, notwithstanding anything contained in any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyer shall, before paying the member, his wages, deduct his contribution from his wages and deposit the same together with his own contribution and other charges as stipulated therein with the provident fund or the fund under the ESI Act within fifteen days of the closure of every month pay. It is clear that the word contribution used in Clause (b) of Section 43B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the return of income under sub-section (1) of Section 139 of the IT Act is made, the employer is entitled for deduction. 21. The submission of Mr. Aravind, learned counsel for the revenue that if the employer fails to deduct the employees' contribution on or before the due date, contemplated under the provisions of the PF Act and the PF Scheme, that would have to be treated as income within the meaning of Section 2(24)(x) of the IT Act and in which case, the assessee is liable to pay tax on the said amount treating that as his income, deserves to be rejected. 22. With respect, we find it difficult to endorse the view taken by the Gujarat High Court. We agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gin of 15.52% on cost in comparison to the assessee's margin at 22.90 on total cost. The assessee adopted Transactional Net Margin Method (TNMM) as Most Appropriate Method (MAM). Thus the assessee claimed its international transactions at Arm's Length Price ('ALP'). The TPO/A.O. rejected the TP Study Analysis of the assessee by raising various objections including multi year data instead of current year data. The TPO finally selected a set of 11 comparables as under: Sl. No. Name of the Comparable Sales (in Rs.) Cost (in Rs.) Margin 1 Kals Information Systems Ltd. 2,14,04,686 1,87,93,813 13.89% 2 Akshay Software Technologies Ltd 12,23,21,483 11,31,49,350 8.11% 3 Bodhtree Consulting Ltd 16,05,75,212 9,89,56,821 62.27% 4 R S Software (India) Ltd 1,49,57,12,634 1,36,01,02,589 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r two companies, the learned Authorised Representative has submitted that the functional comparability of KALS Information Systems Ltd. has been considered by this Tribunal in the case of 3DPLM Software Solutions (P.) Ltd. v. Dy. CIT 2014 (12) TMI 612 - ITAT BANGALORE. The functional comparability of Bodhtree Consulting Ltd. has been considered by the co-ordinate bench of this Tribunal in the case of Marlabs Software (P.) Ltd. v. Dy. CIT [IT (TP) A No. 72/Bang/2014, vide order dated 10-12-2014]. Thus the learned Authorised Representative has submitted that these companies have to be excluded from the set of comparables. 22. On the other hand, the teamed Departmental Representative has submitted that the TPO/A.O. has duly examined the functional comparability of these companies and found that the prominent activity of these companies are software development services and therefore the minor variations are not materia! when the ALP is computed by adopting the TNMM as MAM. 23. We have considered the rival submissions as well as the relevant material on record. As regards Sasken Communication Technology Ltd., we find that the turnover of this company is ₹ 479 crores in comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record. We find that the comparability of this company has been considered by this Tribunal in the case of Marlabs Software (P.) Ltd. (supra) in para 9.3 as under: '9.3 We have heard both parties and perused and carefully considered the material on record, including the judicial decision cited (supra). We find that the co-ordinate bench of this Tribunal in the case of Mindteck (India) Ltd., in IT (TP) A No. 70/Bang/2014 dt.21.8.2014 for Assessment Year 2009-10 has excluded this company form the final list of comparable companies. The relevant portion of this order at para 16 thereof is extracted hereunder :- 16. We have considered the rival submissions. The Special Bench of the ITAT in the case of Maersk Global Centres (supra) had an occasion to deal with the question as to whether high profit margin making companies should be excluded as a comparable. The Special Bench after considering several aspects held in para 88 of its order that the potential comparable companies cannot be excluded merely on the ground that their profit is abnormally high. The Special bench held that in such cases it would require further investigation to ascertain the reasons for unusually hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s arises on account of realization of sale proceeds then it will be in the nature of operating profit/cost of the assessee as well as in the case of comparable companies. However we find substance in the contention of the ld. DR that the foreign exchange fluctuation gain or loss in respect of the sale proceeds of the current year can be considered as operating profit or cost of the year and not the gain or loss arising on account of realization of sale of earlier year. Accordingly, we set aside this issue to the record of the TPO/A.O. for verification of the relevant facts and then recompute the margin of the assessee as well as the comparable companies on the basis of rule of parity in respect of the profit or gain arising from realization of sale during the year under consideration. 30. Ground Nos. 12 to 14 are regarding computation of ALP on share application remitted to the subsidiary. 31. As per the 3CEB Report and TP documentation, the assessee has disclosed an additional investment of ₹ 32,98,75,310 (70,59,000 USD) towards subscription in equity share capital of subsidiary namely Logix America Inc pending for allotment of shares as on 31.3.2009. The assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance to the AE. 33. On the other hand, the learned Departmental Representative has relied upon the orders of the authorities below and submitted that when there is an inordinate gap between the payment of the money to the AE and allotment of shares then it cannot be considered as a simple transaction of share application money. 34. We have considered the rival submissions as well as the relevant material on record. As regards the question of treating the share application money as international transactions, there is no dispute that in ordinary circumstances if the remittance is made as share application money for allotment of shares and shares are allotted within a reasonable period of time then the said payment of money to the AE cannot be considered as loan or advance for the purpose of international transaction under Section 92B of the Act. However, it is pertinent to note that the share application money does not belong to the allotting company till the shares are actually allotted against the said remittance. Thus till the allotment of shares the allotting company cannot have any right to use the share application money rather the share application money has to be kept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing the time period of 180 days, since this is not a case of an ordinary time period of allotment and therefore when this money was available with the AE for use then we do not find any merit or substance in this contention of the learned Authorised Representative. IT (TP) A No. 280/Bang/2014 (Revenue's appeal) 36. The revenue has raised the following grounds : 1. The order of the Dispute Resolution Panel is opposed to law and the facts and circumstances of the case. 2. The DRP erred in directing the AO to carry out a search process from the database 'loan connector' and determine the average credit risk spread on the loan transaction actually undertaken and also in directing that a 100 basis point increase on account of country and foreign exchange risk should be added to the margin without appreciating that the directions to the AO amounts to setting aside the issue which is outside the purview of the DRP under the provision of Section 144C as the DRP is not empowered to set aside the issue in terms of Section 144C(8) of the Act. 3. The DRP erred in directing the AO to follow the ratio laid down by the Hon'ble Court in the case of CIT v. Tata Elxs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10A, in the case of CIT v. Gem Plus Jewellery India Ltd. (2011) [330 ITR P. 175 (Bom.)] (2010-TIOL-456-HC-MUM-IT). Interpreting sub-section (4) of section 10A, it is held as under: Under sub-section (4) the proportion between the export turnover in respect of the articles or things, or as the case may be, computer software exported, to the total turnover of the business carried over by the undertaking is applied to the profits of the business of the undertaking in computing the profits of the business of the undertaking in computing the profits derived from export In other words the profits of the business of the undertaking are multiplied by the export turnover in respect of the articles, things or, as the case may be, computer software and divided by the total turnover of the business carried on by the undertaking. The formula which is prescribed by sub-section (4) of section 10A is as follows: Profits derived from export of articles or things or computer software. Profits of the business of the undertaking. Export turnover in respect of the articles or things or computer software. To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same formula. The submission of the Revenue would lead to a situation where freight and insurance, though these have been specifically excluded from 'export turnover' for the purposes of the numerator would be brought in as part of the 'export turnover' when it forms an element of the total turnover as a denominator in the formula. A construction of a statutory provision which would lead to an absurdity must be avoided. The Special Bench of the Tribunal, in the case of ITO v. Sak Soft Ltd. (2009) 313 ITR (AT) 353 (Chennai) (SB) (2009-TIOL-187-ITAT-MAD-SB) also had an occasion to consider the meaning of the word 'total turnover'. After referring to the various judgments of the High Court as well as the Supreme Court held as under: 53. For the above reasons, we hold that for the purpose of applying the formula under sub-section (4) of section 10B, the freight, telecom charges or insurance attributable to the delivery of articles or things or computer software outside India or the expenses, if any, incurred in foreign exchange in providing the technical services outside India are to be excluded, both from the export turnover and from the total tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature and an ordinary meaning is to be attributed to the same, the said ordinary meaning to be attributed to such word is to be in conformity with the context in which it is used. When the statute prescribes a formula and in the said formula, 'export turnover' is defined, and when the 'total turnover' includes export turnover, the very same meaning given to the export turnover by the legislature is to be adopted while understanding the meaning of the total turnover, when the total turnover includes export turnover. If what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible, if that were the intention of the legislature, they would have expressly stated so. If they have not chosen to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the legislature to the export turnover is to be respected and given effect to, while interpreting the total turnover which is inclusive of the export turnover. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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