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TMI Blog2020 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... tal export sales of ₹ 1880.48 Crores. Before us, learned AR of the assessee could not point out any mistake in this categorical finding of CIT (A) on the basis of assessee s own submissions and therefore, the facts of the present case are different because the export proceeds were not brought into India even after lapse of the prescribed time and hence, this tribunal order and in turn the judgment of Hon ble Karnataka High Court is not applicable in the present case. We, therefore, decline to interfere in the order of CIT (A) on this issue. Ground No.1 is rejected. Expenditure incurred in foreign currency should not be reduced from export turnover Eligible business profits for the purposes of computing deduction u/s 10A - Exclusion amount as profit from trading of third-party software - Appellant had done value addition to the third-party software before supplying it to its customers, thereby making it eligible for deduction u/s 10A - HELD THAT:- We find that in this judgment in the case of CIT Vs. Hewlett Packard Global Soft Ltd. [ 2017 (11) TMI 205 - KARNATAKA HIGH COURT] , the assessee was 100% EOU. We do not know whether in the present case also, the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recting the AO to exclude the expenses incurred in foreign currency outside India from the total turnover of the assessee for computing deduction allowable u/s 10A. On this issue, it was held by Hon ble Karnataka High Court that total turnover is sum total of domestic turnover and export turnover. Therefore, if an amount is reduced from export turnover, then total turnover also goes down by the same amount automatically. In view of this, we find that the direction of the learned CIT(A) is in line with this judgment of Hon ble Karnataka High Court and respectfully following the same, we decline to interfere in the order of CIT(A) on this issue. 4. In the result, appeal of the Revenue is dismissed. 5. Now we take up the appeal of the assessee for Assessment Year 2008-09, i.e., ITA No.2830/Del/2013. The grounds raised by the assessee are as under. 1. That the CIT(A) has erred on facts and in law in upholding the order of the Assessing Officer restricting deduction u/s 10A of the Income Tax Act, 1961 to ₹ 11,18,5g,936/- as against ₹ 19,91,40,406 as claimed by the Appellant . 1.1 On facts and in law, the C1T(A) erred in upholding the order of the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments made for procurement of export orders were not chargeable to tax in India hence no tax was required to be deducted before remittance especially in light of the fact that no finding has been given by the CIT(A) that the income of persons receiving commission for export sales is taxable in India and that when genuineness of the payments and the certificates for nondeduction of tax is not in question, there is no reason to uphold the disallowance. 3.5 The CIT (A) has erred in upholding the order of the Assessing Officer disallowing payments to the tune of ₹ 41,21,993/- made for technical services even though the payment was made for liability incurred in the previous years and the services were utilized by the Appellant for projects undertaken outside India and no tax was required to be deducted in view of the exception provided under section 9(1)(vii)(b) of the Act. 3.6 The CIT(A) has erred in upholding the order of the Assessing Officer disallowing payments to the tune of ₹ 24,49,755/- even though the payment was made to an Indian company and no tax was required to be deducted at source. 3.7 The CIT(A) has erred in upholding the order of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra), we also hold that notwithstanding the fact that there is no express order granting approval by the authorized bankers extending the time limit of six months for receipt of foreign remittances on account of export sales, the assessee is entitled to the benefit of deduction under section 10A of the Act and consequently direct the AO, that those amounts, though realized belatedly, shall be included in the export turnover while computing the deduction under section 10A of the Act. Consequently, ground No.3.1 of the assessee s appeal is allowed. 8. In this para, the Tribunal has followed the judgment of Hon ble Karnataka High Court rendered in the case of Wipro Ltd., Vs. DCIT (2016) 382 ITR 179 and by following this judgment, it was held that even if there is no express order granting approval by the authorized bankers extending the time limit of six months for receipt of foreign remittances on account of export sales, the assessee is entitled to the benefit of deduction under section 10A of the Income Tax Act, 1961. We find that in the preset year, as per page 2 of his order, learned CIT(A) has followed the order of CIT(A) in Assessment Year 2009-10. Since the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is dismissed as academic. 11. As per above para reproduced from the Tribunal order cited by learned AR of the assessee, we find that in that year, the Tribunal had rejected this claim of the assessee that expenditure incurred in foreign currency should not be reduced from export turnover. Respectfully following the same, in this year also, this issue is decided against the assessee. Ground No.2 is rejected. 12. As per Ground No. 3, the issue involved is regarding upholding the exclusion of ₹ 2,76,86,054/- from eligible business profits for the purposes of computing deduction u/s 10A on the ground that the amount was profit from trading of third-party software without appreciating the fact that the Appellant had done value addition to the third-party software before supplying it to its customers, thereby making it eligible for deduction u/s 10A. 13. Learned AR of the assessee placed reliance on the judgment of Hon ble Karnataka High Court rendered in the case of CIT Vs. Hewlett Packard Global Soft Ltd., as reported in 87 taxmann.com 182, copy available on pages 36-42 of case law compendium. He also submitted that in para 3.5.1. of the Assessment Order, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds under which the expenditure disallowed has been incurred were different from those in Assessment Year 2009-10. On this issue, learned AR of the assessee submitted that as per para No.10 of the same Tribunal order in assessee s own case for Assessment Years 2010-11 and 2011-12, this issue is covered in favour of the assessee. Learned DR of the revenue supported the order of AO and CIT (A). 16. We have considered the rival submissions. We find that as per this ground No.4, this is the grievance of the assessee that CIT(A) was not justified in deciding this issue by following its own order for Assessment Year 2009-10 because the facts in the present year are different. We find that in the impugned order for Assessment Year 2008-09, learned CIT(A) has simply stated that the discussion in the appellate order for Assessment Year 2009-10 is adopted mutatis mutandis as part of this order. But in A. Y. 2009 10, this issue about disallowance of export commission due to non deduction of TDS was decided in great detail as per para 3.1 to 3.6 of his order for A. Y. 2009 10. Hence, we decide this ground by considering the finding of CIT (A) in A. Y. 2009 10 as finding for A. Y. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted to receive the same by RBI/Authorized Dealer which should be read as implicit approval of extension of time for collection of export proceeds for the purposes of deduction under section 10A. 1.4 That the CIT(A) has failed to appreciate that it is settled law that if no communication is received to a request made to a statutory authority or its nominee, the request is deemed to be allowed. The CIT(A) has erred in not realizing that even if no explicit approvals were received from the RBI/ Authorized Dealer, it has to be read as implicit approval since no communication has been forthcoming. In light of the implicit approval, the CIT(A) has erred in upholding the exclusion from export proceeds on the ground of non- realization. 2. The CIT(A) has erred on facts and in law in upholding the exclusion of ₹ 18,95,56,662/- from export sales on the ground that it was expenditure incurred in foreign currency without taking into consideration that these amounts were not included in export invoices nor did they form a part of export sales. 2.1 Without prejudice to the above, the amount of ₹ 2,09,50,230/- should be reduced from the excluded amount as it has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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