https://www.taxtmi.com/caselaws?id=275342 The ITAT Bangalore ruled on multiple issues in this software services case. Regarding section 10A deduction computation, the tribunal upheld CIT(A)'s direction to exclude telecommunication charges from both export and total turnover, following Karnataka HC precedent in Tata Elxsi Ltd. For warranty expense provisions, the tribunal found the assessee's method scientific and based on past history, noting consistent treatment across assessment years and proper write-back procedures upon warranty expiry. On transfer pricing, the tribunal supported CIT(A)'s exclusion of functionally dissimilar companies and those with turnover above Rs. 200 crores from comparables. However, regarding software expenditure classification as revenue versus capital, the tribunal remanded the matter to CIT(A) for fresh consideration, finding insufficient factual basis for determining the expenditure's nature despite acknowledging it as operating software. The assessee must provide relevant evidence to establish revenue nature of the expenditure. en-us Fri, 13 Oct 2017 00:00:00 +0530 Mon, 21 Jul 2025 16:54:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=275342 The ITAT Bangalore ruled on multiple issues in this software services case. Regarding section 10A deduction computation, the tribunal upheld CIT(A)'s direction to exclude telecommunication charges from both export and total turnover, following Karnataka HC precedent in Tata Elxsi Ltd. For warranty expense provisions, the tribunal found the assessee's method scientific and based on past history, noting consistent treatment across assessment years and proper write-back procedures upon warranty expiry. On transfer pricing, the tribunal supported CIT(A)'s exclusion of functionally dissimilar companies and those with turnover above Rs. 200 crores from comparables. However, regarding software expenditure classification as revenue versus capital, the tribunal remanded the matter to CIT(A) for fresh consideration, finding insufficient factual basis for determining the expenditure's nature despite acknowledging it as operating software. The assessee must provide relevant evidence to establish revenue nature of the expenditure. Case-Laws Income Tax Fri, 13 Oct 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=275342