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TMI Blog2014 (3) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, in proceedings under section 143(3) r.w.s 92CA of the Income-tax Act, 1961 (in short the 'Act'). 2. A combined perusal of the grounds raised in both appeals makes it apparent that the assessee challenges action of the CIT(A) in excluding the expenses incurred in foreign currency towards computer software development and telecommunication expenditure from export turnover, disallowance u/s 14A, expenditure incurred towards current repairs and software. On the other hand, the Revenue's sole ground is that the lower appellate authority has erred in directing the Assessing Officer to recompute deduction u/s 10A by excluding the telecommunication expenses from export as well as total turnover for the purpose of deduction u/s 10B of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee's plea was that if it was necessary to do so, the same also deserved to be excluded from total turnover as well in view of the special bench decision of the Chennai 'tribunal' in case of ITO vs Saksoft Ltd, 121 TTJ (Chennai) 865. Per Assessing Officer, the department had preferred an appeal before the hon'ble jurisdictional high court and consistency required him to reject the aforesaid explanation. He acted accordingly and recomputed deduction u/s 10A/10B. 7. In lower appellate proceedings, we find that the CIT(A) has accepted the assessee's arguments as follows: "9. Exclusion of Telecommunication Charges and expenditure in foreign Currency from export turnover for computation of deduction u/s. 10A / 10B. While makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asst.Year 2008-09, the appellant has incurred a sum of Rs. 71,05,131/- towards telecommunication expenses in the Chennai unit -II and Rs. 81,43,764/- towards telecommunication expenses in the Bangalore strategic business Unit. While completing the scrutiny, the AO has excluded the telecommunication expenses incurred, only from the export turnover for the purpose of computing deduction u/s 10A and 10B of the Act. 9.3 The AO has also mentioned in the Asst.order that the decision rendered by the Special Bench of Hon'ble ITAT, Chennai in the case of ITO vs. M/s. Saksoft Ltd. (2009) 121 TTJ Chennai (SB 865) wherein it was held that on the basis of Parity Principles, whatever has been excluded from export turnover shall also be excluded fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'tribunal' (supra). That being the case, we see no reason to adopt a different approach in assessee's case merely on the ground that Revenue's appeal u/s 260A is pending. So, the CIT(A)'s action is affirmed. I.T.A. No. 1409/Mds/2013 filed by the Revenue stands dismissed. 9. Now, we come to the grievance of the assessee qua disallowance u/s 14A made by the Assessing Officer of Rs. 97,78,639 u/s 14A r.w.r 8D. He found the assessee to be operating and maintaining investments in mutual funds in large proportions resulting in dividend of Rs. 10,69,15,403/- exempt u/s 10(35) of the Act. Per assessee, no expenses had been incurred for earning this 'exempt' income. The Assessing Officer was of the view that some indirect/administrative expenses a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... renovation in the leasehold premises. He made disallowance by placing on record the assessments of assessment years 2006-07 and 2007-08 wherein the very expenses had been held to be 'capital' in nature. 14. The CIT(A) has also maintained the findings of the Assessing Officer. 15. Before us, the assessee places on record copy of order of the 'tribunal' in I.T.A. No. 480/Mds/2008, dated 31.9.2009, to contend that in assessment year 2004-05, this issue had arisen in assessee's own case which was remanded back to the Assessing Officer. On a query being put up by the bench, it informs us that the Assessing Officer is yet to pass consequential order. In these circumstances, by following the order of the 'tribunal' for assessment year 2004-05, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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