2008 (10) TMI 673

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....-2004 accepting the income returned. Subsequently, the case was selected for scrutiny by issue of notice u/s 143(2) dated 15-10-2004. Order u/s 143(3) of the IT Act was passed on 29-03-2006 accepting the income returned. The CIT observed that the assessee has not excluded the whole of the communication expenses attributable to software delivery from the export turnover for the purposes of computing deduction u/s 10A. By omitting to exclude such expenses in entirety, deduction u/s 10A was claimed by the assessee and this claim was allowed without due verification. The CIT on verification found that the assessee had incurred Rs. 96,79,967/-as data communication expenses and Rs. 16,60,283/- as telephone expenses towards STP Unit. This was not ....

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....on 10A. The CIT also observed that the AO has also not given any specific finding to the effect that the communication costs are not attributable to the delivery of the articles or things or computer software outside India. To that extent, the order u/s 143(3) assed on 29-03-2006 is erroneous and prejudicial to the interest of revenue. Accordingly, the order of AO was set aside with the direction to arrive at an actual expenses attributable to export of computer software for the purpose of export turnover for the computation of income for the export turnover. 3. Before us, the learned AR submitted that the CIT erred in treating the order passed by the AO is prejudicial to the interest's of revenue. The assessee was not provided an op....