TaxTMI 
TaxTMI 
2011 (11) TMI 848
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....ese appeals are disposed off by this consolidated order for the sake of convenience and brevity. 3. The grounds of appeal for both the asst. years are identical. Ground nos. 1 and 7 are general in nature and no specific adjudication is called for and hence, the same are dismissed. 4. Ground Nos.2 to 4 reads as follows:- (2) The learned CIT(A) erred in upholding the order of the AO in reducing the quantum of deduction u/s 10B of the Act in excluding certain items of expenditure incurred outside India by deducting the same from the quantum of export turnover. (3) The learned CIT(A) ought to have appreciated that even if the adjustments as made by the AO are to be held as correct with regard to the export turnover, he should have directed ....
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....the total turnover at an amount inclusive of freight. The relevant details with reference to the claim of the assessee, the adjustment made by the AO are as follows:- Amount in Rupees Claimed by the assessee Adjusted claim as per AO Variance Export turnover 59,40,30,339 57,14,93,308 2,25,378,031 Total turnover 59,40,30,339 59,40,30,339 -- 10B deduction 25,75,01,180 24,62,32,462 1,12,68,718 6.2 The assessee, being aggrieved, filed appeals before the first appellate authority. 6.3 The first appellate authority confirmed the action of the AO. 6.4 The assessee being aggrieved is in appeals before us. 6.5 The learned AR submitted that the issue in question is squarely covered by the judgement of the Hon'ble Mumbai High Court ....
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....undertaking of articles, things or computer software received in or brought into India by the assessee in convertible foreign exchange but so as not to include inter alia freight, telecommunication charges or insurance attributable to the delivery of the articles, things or software outside India. Therefore in computing the export turnover the legislature has made a specific exclusion of freight and insurance charges. The submission which has been urged on behalf of the revenue is that while freight and insurance charges are liable to be excluded in computing export turnover, a similar exclusion has not been provided in regard to total turnover. The submission of the revenue, however, misses the point that the expression "total turnover" ha....
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....these two items would have to be excluded from the total turnover particularly in the absence of a legislative prescription to the contrary - CIT v Sudarshan Chemicals Industries Ltd. (2000) 163 CTR (Bom) 596: (2000) 245 ITR 769 (Bom) applied; CIT v Lakshmi Machine Works (2007) 210 CTR (SC) 1: (2007) 290 ITR 667 (SC) and CIT v Catapharma (India) (P) Ltd. (2007) 211 CTR (SC) 83: (2007) 292 ITR 641 (SC) relied on" 6.8 In the case of Sak Soft Ltd. (supra), the assessee was engaged in the business of exporting computer software and claimed deduction u/s 10B of the Act. In completing the assessment u/s 143(3) of the Act, the AO reduced the expenditure incurred in foreign exchange in providing the technical services outside India, from the expo....
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....expenditure incurred in relation to development of this new product was claimed as revenue expenditure. The AO while completing the assessment for asst. years 2006-07 and 2007-08 treated the above said expenses as capital in nature and held that this is for the development of a new product and the said expenditure is not allowable. The amount of product development expenditure added back was ₹ 4,91,13,880/- for asst. year 2006-07 and ₹ 2,35,53,611/- for asst. year 2007-08. 7.1 On further appeal, the view of the AO was affirmed by the first appellate authority. 7.2 The assessee being aggrieved is in appeal before us. 7.3 The learned AR reiterated the submissions made before the authorities below whereas the learned DR relied o....