2014 (9) TMI 1013 - HC - Income Tax

Computation of deduction u/s.10A - per diem (amount paid to employees in foreign exchange) expenditure incurred in foreign currency - whether to be deducted from the export turnover for the purpose of computing deduction u/s.10A of the Act? - Whether the Tribunal was correct in taking into consideration Explanation 2 (iv) of Section 10A of the Act which clearly contemplated that such expenditure was liable to be deducted from the export turnover for the purpose of computing deduction U/s.10A of the Act? - Held that - This Court had an occasion to consider the said questions of law in the case of Commissioner of Income Tax And Another Vs. MICO 2015 (7) TMI 876 - KARNATAKA HIGH COURT wherein the said substantial questions of law was answered in favour of the assessee and against the revenue.

Summary

The Karnataka High Court dismissed the appeal by the Revenue challenging the Tribunal's order that per diem allowance cannot be reduced from export turnover for deduction under Section 80HHE of the Income Tax Act, as it was not spent on technical services. The Court referred to a previous case where similar questions were answered in favor of the assessee.