Tribunal grants deductions for foreign currency expenses and overseas profits under section 10A.

The Tribunal ruled in favor of the assessee on both issues presented in the case. It held that certain expenditures in foreign currency should be excluded from turnover for deduction purposes under section 10A of the Act. Additionally, profits from services rendered outside India were deemed eligible for deduction under the same section. The Tribunal dismissed the revenue's appeals, upholding the decisions in favor of the assessee. The judgment was issued by the Appellate Tribunal ITAT Bangalore on 18th December 2009.

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Issues involved: The judgment involves two main issues: i) Whether certain expenditures in foreign currency should be reduced from the total turnover for the purpose of deduction u/s 10A of the Act, and ii) Whether profits derived from rendering services outside India are eligible for deduction u/s 10A of the Act.

Issue i - Expenditure in Foreign Currency:
The Tribunal referred to previous decisions and held that expenses incurred in foreign currency on travel and telecommunication should be excluded from both the export turnover and the total turnover for the purpose of deduction u/s 10A of the Act. This decision was based on established precedents and was in favor of the assessee.

Issue ii - Profits from Technical Services:
The Assessing Officer had disallowed a portion of the profits earned from technical services for the relevant assessment years, based on estimated percentages of foreign currency traveling expenses. However, the Commissioner of Income Tax (Appeal) found errors in the assessment and issued a corrigendum. The Tribunal noted that this issue was previously addressed in the assessee's case for a different assessment year, where it was decided in favor of the assessee. The Tribunal upheld the order of the CIT(A) based on consistency with previous decisions.

Conclusion:
The Tribunal dismissed the appeals filed by the revenue, affirming the decisions in favor of the assessee on both issues. The judgment was pronounced on 18th December 2009 by the Appellate Tribunal ITAT Bangalore.

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