TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 357
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....PEAL NO.4543 of 2014 CIVIL APPEAL NO.8536 of 2013 CIVIL APPEAL NO.8500 of 2013 CIVIL APPEAL NO.8506 of 2013 CIVIL APPEAL NO.8553 of 2013 CIVIL APPEAL NO.8499 of 2013 CIVIL APPEAL NO.8526 of 2013 CIVIL APPEAL NO.8501 of 2013 CIVIL APPEAL NO.8538 of 2013 CIVIL APPEAL NO.8491 of 2013 CIVIL APPEAL NO.1098 of 2016 CIVIL APPEAL NO.8505 of 2013 CIVIL APPEAL NO.8510 of 2013 CIVIL APPEAL NO.8513 of 2013 CIVIL APPEAL NO.8507 of 2013 CIVIL APPEAL NO.8504 of 2013 CIVIL APPEAL NO.8503 of 2013 CIVIL APPEAL NO.8519 of 2013 CIVIL APPEAL NO.8927 of 2013 CIVIL APPEAL NO.8791 of 2012 CIVIL APPEAL NO.8528 of 2013 CIVIL APPEAL NO.8523 of 2013 CIVIL APPEAL NO.8554 of 2013 CIVIL APPEAL NO.8509 of 2013 CIVIL APPEAL NOs. 8521-8522 of 2013 CIVIL APPEAL NO.147 of 2013 CIVIL APPEAL NO.8912 of 2012 CIVIL APPEAL NO.6594 of 2015 CIVIL APPEAL NO.8561 of 2013 CIVIL APPEAL NO.8531 of 2013 CIVIL APPEAL NO.8544 of 2013 CIVIL APPEAL NO.8550 of 2013 CIVIL APPEAL NO.8545 of 2013 CIVIL APPEAL NO. 4394 OF 2018 (Arising out of Special Leave Petition (C) NO. 35917 OF 2012) CIVIL APPEAL NO. 8929 of 2013 CIVIL APPEAL NO.1099 of 2016 CIVIL APPEAL NO.10830 of 2014 CIVIL APPEAL NO. 4395 OF 2018 (Arising out of Special Leave Peti....
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....ion (C) NO. 31420 OF 2016) CIVIL APPEAL NO. 9319 of 2016 CIVIL APPEAL NO. 2999 of 2017 CIVIL APPEAL NO.4614 OF 2018 (Arising out of Special Leave Petition (C) NO. 6983 OF 2017) CIVIL APPEAL NO. 2998 of 2017 CIVIL APPEAL NO. 3059 of 2017 CIVIL APPEAL NO. 4612 OF 2018 (Arising out of Special Leave Petition (C) NO. 32723 OF 2016) CIVIL APPEAL NO. 11716 of 2016 CIVIL APPEAL NO. 4613 OF 2018 (Arising out of Special Leave Petition (C) NO. 36154 OF 2016) CIVIL APPEAL NO. 911 of 2017 CIVIL APPEAL NO. 3948 of 2017 CIVIL APPEAL NO. 2419 of 2017 CIVIL APPEAL NO. 1535 of 2017 CIVIL APPEAL NO. 1536 of 2017 CIVIL APPEAL NO. 3797 of 2017 CIVIL APPEAL NO. 2420 of 2017 CIVIL APPEAL NO. 3060 of 2017 CIVIL APPEAL NO. 3275 of 2017 CIVIL APPEAL NO. 3651 of 2017 R. K. Agrawal And R. Banumathi, JJ. JUDGMENT R.K. Agrawal, J. 1) Leave granted. 2) These appeals have been filed against the impugned judgment and order dated 15.12.2009 passed by the High Court of Delhi in ITA Nos. 1244 and 1250 of 2009 whereby the Division Bench of the High Court had dismissed the appeals filed by the Revenue - the appellant herein while upholding the order passed by the Income Tax Appellate Tribunal (in short 'the Tribun....
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....eing No. ITA No. 1250 of 2009. The High Court, vide order dated 15.12.2009, dismissed the appeal of the Revenue. (g) Hence, these appeals have been filed before this Court. 4) Heard learned senior counsel for the parties and perused the factual matrix of the instant case. Point(s) for consideration:- 5) The only point for consideration before this Court is whether in the facts and circumstances of the case, the software development charges are to be excluded while working out the deduction admissible under Section 10A of the IT Act on the ground that such charges are relatable towards expenses incurred on providing technical services outside India? Rival contentions:- 6) At the outset, learned senior counsel for the Revenue submitted that when the total turnover is not defined under Section 10A of the IT Act, the ordinary meaning of the words is to be adopted. As it was a technical term, the technical meaning of total turnover, which does not envisage the reduction of any expense from the total amount, was to be taken into consideration for computing deduction under Section 10A of the IT Act. Hence, the fact that the Respondent has claimed expenses like freight, telecommunic....
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....ion that has been received for export of articles/things/computer software. Normally the consideration will include the freight/telecommunication charges/insurance which had been incurred to deliver the article/things/computer software outside India. However the Explanation 2(iv) specifically seeks to exclude these three categories of expenditure incurred for delivering the export of articles/things/computer software. It also seeks to exclude expenses for providing technical service, etc. outside India. Therefore, where an Indian technician goes abroad and receives fees for service, the foreign client will normally be required to reimburse the expenses as well. Therefore, out of the consideration received, the portion representing reimbursement of expenditure has to be excluded. Export Turnover and Total turnover: The "total turnover" has been defined in sections 80HHC and 80HHE only to exclude additional items given under section 28. But for this additional exclusion, there was no need to define "total turnover". Export turnover is a component of total turnover. If the entire turnover represents export proceeds, then the export turnover and the total turnover are identical. ....
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....ry etc. on rendering such services. Inspite that, learned CIT (Appeals), estimated 10% of software development charge as charges incurred for technical services provided outside India. 12) It is undisputed fact that the Respondent was engaged in the business of software development for its customers engaged in different activities at software development centres of the Respondent. However, in the process of such customized software development, certain activities were required to be carried out at the sight of customers on site, located outside India for which the employees of the branches of the Respondent located in the country of the customers are deployed. It is true that it is not defined that which activity will be termed as providing technical services outside India. Moreover, after delivery of such softwares as per requirement, in order to make it fully functional and hassle free functioning subsequent to the delivery of softwares in many cases, there can be requirement of technical personnel to visit the client on site. The Assessing Officer could not bring any evidence that the Respondent was engaged in providing simply technical services independent to software developm....
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....Court has held as under: "46. Where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the Legislature, the Court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a rational construction. The task of interpretation of statutory provision is an attempt to discover the intention of the Legislature from the language used.... 47 ....If the purpose of a particular provision is easily discernible from the whole scheme of the Act which, in the present case, was to counteract, the effect of the transfer of assets so far as computation of income of the Respondent was concerned, then bearing that purpose in mind, the intention should be found out from the language used by the Legislature and if strict literal, construction leads to an absurd result, i.e. result not intended to be subserved by the object of the legislation found out in the manner indicated above, then if other construction is possible apart from strict literal construction, then that construction should be preferred to the strict literal construction. Though equity an taxation a....