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TMI Blog2015 (10) TMI 1592X X X X Extracts X X X X X X X X Extracts X X X X ..... id down by the Hon'ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT]. We are therefore of the view that the order of the CIT(Appeals) is just and proper and calls for no interference. Accordingly the appeal by the Revenue is dismissed. - Decided in favour of assessee. - IT (TP)A No. 1632/Bang/2014 - - - Dated:- 26-5-2015 - N V Vasudevan, JM And Abraham P George, AM,JJ. For the Appellant : Shri P Dhivahar, Jt. CIT(DR) For the Respondent : Shri Bharath Agarwal, CA ORDER Per N V Vasudevan: This appeal by the revenue is against the order dated 3.9.2014 of the CIT(Appeals)-III, Bengaluru relating to assessment year 2009-10. 2. The assessee is engaged in the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the eligible deduction under section 10AA of the Act. 5. The assessee had incurred expenditure towards telecommunication, freight and insurance amounting to ₹ 7,024,483, ₹ 3,810,473 and ₹ 2,341,410 respectively. The AO has reduced the said amounts in computing the export turnover of the assessee by holding that the same is attributable to the delivery of software outside India, and consequently reduced the amount of deduction claimed under section 10AA of the Act. According to the assessee, the telecommunication, freight and insurance expenses were not incurred for the purpose of delivery of the articles or things outside India. Therefore, there should be no requirement to reduce such expenses from the export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not clear as to what was the factual basis for the AO's observation that the assessee is engaged in the business of export of software. Appellant has also stated that the value of goods exported is the FOB value and therefore it cannot be said that the telecommunication freight and insurance expenses have been incurred for the purpose of export of articles outside India. The appellant's contentions are borne out from the documentary evidence of the statements of accounts. In my view since the AO's observations regarding the business of the appellant are misplaced, there is no factual justification for treating the expenditure incurred in foreign currency for telecommunication, freight, insurance and foreign travel as amounts re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) has erred in directing the AO to reduce the expenditure incurred in foreign currency, both from the export turnover as well as total turnover for the purpose of computation of deduction u/s. 10AA and allowed deduction of ₹ 36,065,831/- as claimed by the assessee. 3. The learned CIT(A) has failed to appreciate the fact that the statute allows exclusion of such expenditure only from the ETO by way of specific definition of export turnover as envisaged by sub-clause(i) of Explanation 1 below sub-section 9 of section 10A. 10. We are of the view that the arguments advanced by the ld. DR are contrary to the facts as recorded by the CIT(Appeals), about which there is no dispute. The arguments are also contrary to the princ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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