TaxTMI 
TaxTMI 
2014 (11) TMI 604
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....es incurred in foreign currency, both from the 'export turnover', for the purpose of recomputing the deduction u/s 10A of the Act?" 3. At the time of hearing nobody was present on behalf of the assessee neither any adjournment was sought. We, therefore, proceeded ex-parte qua the assessee and the issue is decided after hearing the ld. DR, off course on merit. 4. Facts of the case in brief are that the assessee was engaged in the business of Business Process Outsourcing (BPO), which provides back office services to its overseas clients. The unit of the assessee was eligible for deduction u/s 10A of the IT Act, 1961 (hereinafter referred to as the Act). During the course of the assessment proceedings the Assessing Officer noticed that the a....
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....harat Earth Movers Ltd. (2004) 268 ITR 232 8. The ld. CIT(A) after considering the submissions of the assessee held that the action of the AO was not justified and that none of the expenses identified by the AO ought to have been excluded from export turnover as those were not incurred for providing Technical services outside India and there was no nexus of communication expenses with export of services. The relevant findings had been given by the ld. CIT(A) in the impugned order at paras 6 to 6.5 which read as under: "6. I have carefully considered the facts of the case in the light of the above submissions made by the appellant and applicable law in this regard. Accordingly, my decision on various grounds is as under: 6.2 The provision....
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....turnover' per se and hence, these were not included in 'Export Turnover'. Therefore, there was no onus on the appellant to exclude the same from ETO. 6.3 Without prejudice to the above, I find that the Ld. AO failed to appreciate that various expenses incurred by the appellant in foreign exchange were not incurred for providing Technical services outside India. Only when there is a proximate nexus between the expenses and provisions of Technical services outside India that these could be considered for exclusion from ETO. Since the appellant provides back office services from India, it is evident, on perusal of invoices, that no technical services were rendered by the appellant outside India. Hence, the action of the Ld. AO was not justifi....
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.... of exclusion of the same from the export turnover. Moreover, the ld. CIT(A) categorically stated in para 6.4 of the impugned order that the communication expenses amounting to Rs. 18,27,434/- were related to domestic usage and there was no nexus of the same with export of services. It is also noticed that Explanation 2(iv) to sec. 10A of the Act provides that freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the Technical services outside India not to be included in export turnover. 11. On a similar issue the Hon'ble Bombay High Court in the case of CIT Vs Gem Plus Jewellery India Ltd. 330 ....