TaxTMI 
TaxTMI 
2020 (3) TMI 181
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....nnai dated 28.02.2011. 3. A Coordinate Bench of this Court admitted the present appeal on the following substantial questions of law on 23.08.2011. "T.C.No.312 of 2011 Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the expenditure incurred in foreign exchange for providing technical services outside India to the tune of Rs. 4,83,46,037/- could not be excluded from the export turnover for the purpose of computing deduction under Section 10B without properly applying the provisions of Explanation 2(iii) to Section 10B? T.C.No.385 of 2011 Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that product development ex....
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....evenue fairly submitted that the controversy is no longer res integra in view of the decision of the Hon'ble Supreme Court in the case of "Commissioner of Income Tax -Vs- Mphasis Ltd" reported in [2020] 113 taxmann.com 74 decided on 13.11.2019, has affirmed the view taken by the Division Bench of the Karnataka High Court and the Hon'ble Supreme Court has held that such expenditure incurred by the Assessee in foreign currency will be includible in the definition of 'export turnover' for the purpose of computing deduction under Section 10B of the Act. 6. The relevant portion of the judgment of the Division Bench of the Karnataka High Court in "CIT -Vs- Mphasis Ltd.," reported in [2016] 74 taxmann.com 274 (Karnataka) is quoted....
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....case of export out of India of computer software or its transmission from India to a place outside India by any means. The law makes a distinction between technical services rendered in connection with export of computer software and export of technical services for the purpose of development or production of computer software outside India. If the technical services rendered by the assessee's Engineers is in connection with the export of computer software for the purpose of testing, installation and monitoring of software such a turnover do not fall within clause (ii) of subsection (1) of section 80HHE of the Act. Such a turnover falls within sub-clause (i) of subsection (1) of Section 80HHE of the Act, that is export out of India of c....
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....velopment or production of computer software. It falls under sub-clause (1) of sub-section (1) of Section 80 HHE of the Act. Therefore, the said expenditure cannot be excluded in computing export turn over. In that view of the matter we do not see any merit in this appeal. Accordingly, the said question of law is answered in favour of the assessee and against the revenue. Ordered accordingly. 3. In view of the said judgment, the substantial question of law is answered in favour of the assessee and against the Revenue. 4. Insofar as the second substantial question of law is concerned, the same was considered by this Court in the case of Commissioner of Income-Tax And Another Vs. Tata Elxsi Ltd., reported in (2012) 349 ITR 98 (Karn) .....
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....urnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denominator cannot be different. Therefore, though there is no definition of the term 'total turnover' in Section 10-A, there is nothing in the said Section to mandate that, what is excluded from the numerator that is export turnover would nevertheless form part of the denominator. Though when a particular word is not defined by the legislature and an ordinary meaning is to be attributed to the same, the said ordina....
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....urt and the relevant portion of the judgment is quoted below for ready reference. "1.The instant petition is filed by the petitioner-Revenue assailing the judgment dated 01.08.2014 passed by the High Court of Karnataka at Bangalore in I.T.A.No.1075 of 2008. 2. When the petition is taken up for consideration, Mr.Vikramjit Banerjee, learned Additional Solicitor General appearing for the petitioner-Revenue and Mr.Parcy Pardiwala, learned Senior Counsel appearing for the respondent, are in agreement that SLP (C) No.2373/2015 preferred by the Revenue in respect of connected ITA No.196 of 2009 which was disposed of by the very same common order dated 01.08.2014 was dismissed by this Court on 28.01.2019 having taken note similar grounds raised....