Telecom charges included in turnover calculation, court upholds decision, appeal dismissed.

The High Court of Telangana and Andhra Pradesh held that telecommunication charges and expenditure on technical services outside India should not be excluded from turnover calculations. The court relied on a Supreme Court judgment to support this decision. Additionally, the court found no perversity in the Tribunal's decision and dismissed the appeal without costs, concluding the case.

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Issues:
1. Whether telecommunication charges and expenditure on technical services outside India should be excluded from export turnover and total turnover.
2. Whether the Tribunal's decision is liable to be set aside as being perverse and not based on due reasoning.

Issue 1: Telecommunication Charges and Expenditure on Technical Services Outside India

The appeal under Section 260-A of the Income Tax Act, 1961 raised the question of whether telecommunication charges and expenditure on technical services outside India should be excluded from export turnover and total turnover. The court referred to a judgment of the Supreme Court in C.I.T v. HCL Technologies Ltd., (2018) 404 ITR 719 (SC), which held that allowing deductions only in respect of export turnover and not from total turnover would result in an inadvertent, unlawful, meaningless, and illogical outcome, causing injustice to the assessee. Following this precedent, the court ruled against the revenue on this issue, stating that such deductions should not be excluded from turnover calculations.

Issue 2: Tribunal's Decision

The court examined whether the Tribunal's decision was perverse and lacked due reasoning. After reviewing the order of the Tribunal, the court found no perversity in its findings. Consequently, the court determined that the second substantial question of law, regarding the validity of the Tribunal's decision, did not warrant consideration. As a result, the court dismissed the appeal with no order as to costs, thereby closing any pending miscellaneous petitions related to the case.

In conclusion, the High Court of Telangana and Andhra Pradesh ruled against excluding telecommunication charges and expenditure on technical services outside India from turnover calculations. The court also found no fault in the Tribunal's decision, leading to the dismissal of the appeal.

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