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TMI Blog2014 (8) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... ign exchange in providing technical services outside India of ₹ 62.7 lakhs was excluded in computing the export turnover and total turnover for arriving at deduction u/s 80HHE of the Act - The software Engineers deputed abroad who among other things have to do testing, installation and monitoring of software supplied to the client - the expenditure cannot be excluded in computing export turn over – Decided against Revenue. Computation of deduction u/s 10B - Expenses in foreign currency of telecommunication expenses – Held that:- Following the decision in Commissioner of Income-Tax And Another Vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] - if the export turnover in the numerator is to be arrived at after excluding c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g two substantial questions of law : 1. Whether the Tribunal was correct in reversing the finding recorded by the Assessing Officer that the foreign currency for providing software development services outside India should be excluded from the export turnover for the purpose of computation of deduction u/s.10B of the Act, which was confirmed by the Appellate Commissioner? 2. Whether the Tribunal was correct in reversing the finding of the Assessing Officer that the expenditure incurred in foreign currency on account of telecommunication expenses should be included in the total turnover for the purpose of computation of deduction u/s.10B of the Act? 2. The first substantial question of law arose for consideration before this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transmission from India to a place outside India by any means. The law makes a distinction between technical services rendered in connection with export of computer software and export of technical services for the purpose of development or production of computer software outside India. If the technical services rendered by the assessee's Engineers is in connection with the export of computer software for the purpose of testing, installation and monitoring of software such a turnover do not fall within clause (ii) of subsection (1) of section 80HHE of the Act. Such a turnover falls within sub-clause (i) of subsection (1) of Section 80HHE of the Act, that is export out of India of computer software or its transmission from India to a pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under sub-clause (1) of sub-section (1) of Section 80 HHE of the Act. Therefore, the said expenditure cannot be excluded in computing export turn over. In that view of the matter we do not see any merit in this appeal. Accordingly, the said question of law is answered in favour of the assessee and against the revenue. Ordered accordingly. 3. In view of the said judgment, the substantial question of law is answered in favour of the assessee and against the Revenue. 4. Insofar as the second substantial question of law is concerned, the same was considered by this Court in the case of Commissioner of Income-Tax And Another Vs. Tata Elxsi Ltd., reported in (2012) 349 ITR 98 (Karn). It has been held as under: 17. From the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denominator cannot be different. Therefore, though there is no definition of the term 'total turnover' in Section 10-A, there is nothing in the said Section to mandate that, what is excluded from the numerator that is export turnover would nevertheless form part of the denominator. Though when a particular word is not defined by the legislature and an ordinary meaning is to be attributed to the same, the said ordinary meaning to be attributed to such word is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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