TaxTMI 
TaxTMI 
2008 (9) TMI 951
X X X X Extracts X X X X
X X X X Extracts X X X X
....urrency for providing technical services outside India cannot be excluded from the export turnover. 3. The learned CIT(A) failed to appreciate the fact that the assessee has taken contradictory stand with respect to reduction of expenses in foreign currency from export turnover before CIT(A), while on its own it had reduced the expenses in foreign currency from export turnover and the total turnover. 4. The learned CIT (A) has erred in arriving at his findings without verifying the assessee's contention that it does not provide any technical service outside India. 5. For these and such other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (A) be set aside and that of the AO restored." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs out a question whether pre-execution work and post-execution of software project could be regarded as technical services distinguishable from computer software. The answer is a clear No, as these works are integral to the overall work and not separate components. Perusal of definition of computer software and the listing of the services in the Notification by the Board, rules out any such narrow interpretation. What is computer software is clearly defined, it includes products and services. There is no distinction between services rendered prior to or during the course of or after the project is executed. There is no such distinction in the Act. This issue has been elaborately discussed by the ITAT in the case of Infosys and also in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the technical services outside India. It was therefore argued that expenditure incurred in respect of on site development is to be excluded for the purpose of export turnover. The learned DR stated that the expenditure in foreign currency is incurred for the business of the assessee and therefore, such expenditure is to be proportionately allocated in respect of units, which are making exports and also in respect of units, which are not making export. 24.4 On the other hand, the learned AR supported the order of the learned CIT (A). 24.5 We have heard both the parties. In respect of expenditure incurred on on-site development, the issue stands covered by the order of this Tribunal in the case of Infosys Technologies Ltd. This Bench i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... relate to the goods and not for the services. Computer software is developed by providing off site expenses and on site expenses. The amount receivable in respect of computer software does not include any reimbursement of on site expenses. Payments made to Engineers employed on site are for the development of software. By such development, the assessee has not rendered any technical services relevant to Clause (iv) of Explanation 2 of section 10A technical services have not been defined. The CBDT vide Circular No.694 dated 23.11.1994 stated that computer programmes are not physical goods but are developed as a result of an intellectual analysis of the system and method followed by the purchaser of the programme. If is open prepared on site....