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TMI Blog2012 (5) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... n all material aspects the order of the CIT(A) cannot be perverse - against revenue - ITA No. 120/Bang/2011 - - - Dated:- 18-10-2011 - N. Barathvaja Sankar, George George K, JJ. Etwa Munda, CIT-III for the Appellant Ajay Rotti, CA, for the Respondent ORDER George George K: This appeal instituted by the department is directed against the order of the CIT(A)-III, Bangalore dated 19/10/2010.. The relevant asst. year is 2006-07. 2. The solitary issue that is raised in this appeal is whether the CIT(A) is justified in directing Assessing Officer to exclude telecommunication expenses amounting to Rs.2,45,84,173/- from the total turnover for the purpose of computation of deduction u/s 10A of the I T Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble Mumbai High Court in the case of CIT v Gem Plus Jewellery India Ltd. 330 ITR 175 and the decision of the Special Bench in the case of ITO v M/s Sak Soft Ltd. 313 ITR 353, directed the AO to exclude the above said expenses from both the export turnover and the total turnover for the purpose of computation of deduction u/s 10A of the Act. 7. Aggrieved by the order of the CIT(A), the department is in appeal before us. 8. The learned DR relied on the findings of the AO. 9. On the other hand, the learned AR submitted that the issue in question is squarely covered by the judgement of the Hon'ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. 330 ITR 175 and the order of the Special Bench in the case of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges 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" has not been defined at all by Parliament for the purposes of s.10A. However, the expression "export turnover" has been defined. The definition of "export turnover" excludes freight and insurance. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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" 10.1 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 export turnover without corresponding reduction from total turnover, thereby reducing the deduction claimed by the assessment u/s 10B of the Act. 10.2 In light of the above facts, the Special Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X
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