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TMI Blog2013 (10) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... xport turnover and total turnover for computation u/s 10A of the Income tax act – Held that:- When the Assessing Officer has not disputed that the amounts in dispute are in the nature of reimbursement, hence, should not form part of the export turnover for the purpose of computing deduction u/s 10A of the Act, then, the same cannot also form part of the total turnover for the said purpose - No profit element is embedded in the aforesaid amounts. Therefore, the direction of the CIT(A) to reduce the aforesaid amounts from the export turnover as well as total turnover while computing deduction u/s 10A of the Act is perfectly in order and requires no interference – Decided against the assessee. - M.A. No. 151/Hyd/13 (in ITA No. 268/Hyd/2011), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been averred in the Miscellaneous Application, the Tribunal has overlooked these facts. The assessee, therefore, has contended that since the Tribunal failed to adjudicate on the issues raised in the above mentioned grounds there is a mistake apparent on the face of the record which needs rectification. 4. The learned AR in course of hearing before us submitted that so far as the issue relating to reduction of communication charges and insurance charges attributable to the delivery of computer software outside India from the export turnover without deducting the same from the total turnover is concerned, the ITAT, Hyderabad Bench in assessee's own case for the AY 2003-04 in ITA No. 757/Hyd/2006 had decided the issue by holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material on record. The assessee in its appeal raised the following issues in Ground Nos. 7 8 and Ground No. (ii). "Ground No. 7: Erred in law and on facts in considering the communication charges and insurance charges incurred by the appellant as attributable to the delivery of computer software outside India and accordingly upheld the action of the learned Assessing Officer in reduction of the same from the export turnover for the computation of deduction u/s 10A of the Act for the Hyderabad unit. Ground No. 8: Erred in law and on facts in confirming the action of the learned Assessing Officer to reduce the amount of reimbursement of expenses to Virtusa Corporation, USA of Rs. 33,96,032/- from the export turnover for the comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court, we rectify the mistake by directing the Assessing Officer to compute deduction u/s 10A of the Act by reducing the communication charges and insurance charges from export turnover as well as the total turnover. The aforesaid view is also in consonance with the ratio laid down by the Hon'ble Bombay High court in case of Gemplus Jewellery India Ltd., 330 ITR 175 and also special bench decision of the Chennai Tribunal in case of ITO Vs Saksoft Ltd (313 ITR AT 353). We direct accordingly. 9. So far as the issue raised in Ground No. 8 relating to reduction of reimbursement of expenses to Virtusa Corporation, USA from export turnover is concerned, since the same is co-related to the MA filed by the Department, we will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en that while computing deduction u/s 10A of the Act, the Assessing Officer had reduced the reimbursement of expenses to Virtusa Corporation, U.K., amounting to Rs. 33,96,032/- by holding that the said amount has been shown as reimbursement with a view to escape restriction in Clause iv) to Explanation 2 to section 10A. He further concluded that the said amount cannot form part of the export turnover and accordingly reduced the same from export turnover while computing deduction u/s 10A. The assessee challenged the same before the CIT(A) by contending that the assessee had reimbursed actual cost incurred by Virtusa Corporation in addition to expenses like travel etc., which has also been found to be within the arm's length by TPO. It was fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in the order of the CIT(A) as it is in consonance with the ratio laid down in various judicial precedents as referred to by him in his order. When the Assessing Officer has not disputed that the amounts in dispute are in the nature of reimbursement, hence, should not form part of the export turnover for the purpose of computing deduction u/s 10A of the Act, then, the same cannot also form part of the total turnover for the said purpose. Further, the CIT(A) has rightly held that no profit element is embedded in the aforesaid amounts. Therefore, the direction of the CIT(A) to reduce the aforesaid amounts from the export turnover as well as total turnover while computing deduction u/s 10A of the Act is perfectly in order and requires no int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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