AI Drafter 
TaxTMI 
TaxTMI 
2009 (5) TMI 937
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..... 3. The CIT has erred in directing the assessing officer to reduce the telecommunication expenses from the total turnover besides the Export turnover for parity while computing deduction u/s. 10A of the Act. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) may be cancelled and that of the Assessing Officer may be restored." 3. The assessee's Authorised Representative vide his letter dated 12/12/2008 has submitted as under: "We refer to the above appeal filed by the Assistant Commissioner of Income-tax against the order of the Commissioner of Income-tax Appeals for AY 2004-05. In connection with the above, we wish to inform you that the notice of appeal filed by the appellant to the Tribunal was received by the company on 9 June 2008. The company desired to file a memorandum of Cross Objections with reference to the Revenue's appeal. Accordingly, Memorandum in form No.36A duly signed was sent through a messenger to the Income-tax Appellate Tribunal for the purpose of filing. It would appear that the said messenger inadvertently filed it in the office of the Senior Authorised Repr....
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....osed of in this common order for the sake of convenience and clarity. 6. Let us first proceed to consider the Revenue's grievance. Out of five grounds raised, ground Nos.1, 4 and 5 are general which, in our considered view, do not survive for adjudication. The remaining two effective grounds are dealt with as under: 7. In the first effective ground, it was contended that the CIT(A) had erred in directing the AO to reduce the expenses incurred in foreign currency for providing the software development from the total turnover while computing the deduction u/s 10A of the Act. 7.1. It was contended by the assessee that the disputed amount so excluded is also to be reduced from the total turnover in computing the deduction. It was, further, contended that the total turnover would include the export turnover and non-export turnover. In computing the deduction what was reduced from the export turnover should also be reduced from the total turnover as a matter of parity notwithstanding that the total turnover is not defined in the said section. 7.2. The assessee had also placed strong reliance on the following decisions: (i) In the case of Tata Elexsi Limi....
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.... (ii) Infosys Technologies had held that "up-linking charges reduced from the export turnover are also not be included in the total turnover in computing the deduction u/s 10A"; and (c) In the case of Mphasis Ltd., the Hon'ble Tribunal, following the order in the case of M/s. Infosys Technologies Ltd. v. JCIT [109 TTJ (Bang) 631) had held that: "4. .......The facts in the present case are similar. Therefore, applying the same, we direct the AO not to exclude expenses incurred in foreign currency for providing software development outside India from the export turnover................." 9.2. Respectfully following the findings of the Hon'ble Tribunal cited supra, we uphold, the action of the Ld.CIT(A) on this count. It is ordered accordingly. This ground of the Revenue is dismissed. 10. The second effective ground is with regard to reduce the telecommunication expenses from the total turnover besides the export turnover for parity while computing deduction u/s 10A. 10.1. The Ld. AO had not reduced the expenses from the total turnover on the ground that the total turnover, unlike the export turnover, was not defined in the Act and, ....
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....side India, it was explained that the same were incurred in connection with development of software and services provided by the assessee outside India. Therefore, it was not excludible from the gross export turnover in arriving at the export turnover for computing deduction u/s 10-B of the Act. After considering the rival submissions, the Hon'ble Tribunal was of the firm view that the issue was squarely covered by the order of the Hon'ble Tribunal in the case of M/s.Infosys Technologies Ltd. vs. JCIT reported in 109 TTJ (Bang) 631. By extensively quoting the said finding, the Tribunal had concluded thus,- "4. ............The facts in the present case are similar. Therefore, applying the same, we direct the AO not to exclude expenses incurred, in foreign currency for providing software development outside India from the export turnover....." 12.3. As the issue on hand is similar to that of the issue decided by the Tribunal referred supra, respectfully following the same, we direct the AO not to exclude expenses incurred in foreign currency for providing software development outside India from the export turnover. It is ordered accordingly. 13. The second issu....