2009 (11) TMI 957 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) regarding deduction u/s 10A of IT Act for reducing telecommunication expenses from export turnover and total turnover.

Summary:

Issue 1: Deduction u/s 10A - Telecommunication expenses
The revenue appealed against CIT(A)'s order directing AO to allow deduction by reducing telecommunication expenses from export turnover and total turnover for computing deduction u/s 10A of IT Act. The revenue argued that in absence of an express provision, the ordinary meaning of total turnover should be adopted for computation. The company had not made any adjustment in export turnover for data-link charges attributable to delivery of software outside India. The AO reduced data-link charges from export turnover but not from total turnover, resulting in reduced export turnover ratio. CIT(A) directed to exclude data-link charges based on Tribunal decisions. The Tribunal upheld CIT(A)'s order citing uniformity in reducing expenses from both turnovers for deduction u/s 10A.

Conclusion:
The Tribunal dismissed the revenue's appeal, upholding CIT(A)'s order regarding deduction u/s 10A of IT Act for telecommunication expenses, following the co-ordinate bench decision in the assessee's own case.