Tribunal upholds exclusion of expenses from export turnover under IT Act

The Tribunal dismissed Revenue's appeals for both assessment years, upholding the CIT(A)'s orders regarding the exclusion of communication expenses and foreign exchange from export turnover under section 10A of the IT Act. The Tribunal referred to a previous case in support of its decision, rejecting Revenue's arguments. Additionally, the assessee's cross-objection for the assessment year 2004-05 was dismissed as it was not pursued during the hearing.

---

---

Issues involved: Appeal against orders of CIT(A) for assessment years 2003-04 and 2004-05 regarding exclusion of communication expenses and foreign exchange from export turnover u/s 10A of IT Act.

For assessment year 2003-04: The assessee, engaged in software development, claimed deduction u/s 10A and filed return with taxable income. AO excluded communication charges and foreign exchange from export turnover, resulting in higher total income. CIT(A) upheld AO's decision but directed to reduce expenses from total turnover as well. Revenue appealed, arguing against this direction. Tribunal referred to a previous case and upheld CIT(A)'s decision, rejecting Revenue's grounds.

For assessment year 2004-05: Similar to the previous year, AO reduced internet charges from export turnover, leading to a different eligible deduction amount. CIT(A) upheld AO's decision with a similar direction as in the previous year. Revenue appealed, contesting the direction to exclude expenses from total turnover. Tribunal referred to the same previous case and upheld CIT(A)'s decision, rejecting Revenue's grounds.

Conclusion: Tribunal dismissed Revenue's appeals for both years, following the decision in a previous case and upholding CIT(A)'s orders regarding the exclusion of communication expenses and foreign exchange from export turnover u/s 10A of the IT Act. The assessee's cross-objection for the assessment year 2004-05 was also dismissed as it was not pressed during the hearing.

---