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TMI Blog2021 (2) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the Tribunal, the Revenue has filed the above appeals. 2.The assessee company is engaged in the business of maintenance and development of software and claims deduction under Section 10A of the Income Tax Act, 1961 ("the Act"for brevity) and excluded telecommunication charges from total turnover as well as the expenses incurred in foreign currency while computing deduction under Section 10A. For the Assessment Year 2005-2006, software expenses have also been claimed as revenue expenditure. Hence, in all these three Assessment Years, almost identical issues were involved. Hence, all the three matters are taken up together and disposed of by this common judgment. 3.The Assessing Officer, while making the adjustments, relied on E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right in holding that for the purpose of applying the formula under sub-section (4) of section 10A, the freight, telecom charges, or insurance attributable to delivery of articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India ought to be excluded both from the export turnover and from total turnover even though the statue has provided for such exclusion only from the export turnover?" 6.When the appeals were taken up for hearing, Mrs.V.Pushpa, learned Standing Counsel, appearing for the Department, fairly submitted that the issue involved in the present appeals is covered by the decision of the Hon'ble Supreme Court of India reported in 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-Tax, Bangalore v. Mphasis Ltd.], wherein, the Karnataka High Court has held as follows : "4.Insofar as the second substantial question of law is concerned, the same was considered by this Court in the case of CIT v. Tata Elxsi Ltd. [2012] 17 taxmann.com 100/204 Taxman 321/349 ITR 98 (Kar). It has been held as under: "17. From the aforesaid judgments, what emerges is that, there should be uniformity in the ingredients of both the numerator and the denominator of the formula, since otherwise it would produce anomalies or absurd results. Section 10A is a beneficial section. It is intended to provide incentives to promote exports. The incentive is to exempt profits relatable to exports. In the case of combined business of an assessee, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in conformity with the context in which it is used. When the statute prescribes a formula and in the said formula, 'export turnover' is defined, and when the 'total turnover' includes export turnover, the very same meaning given to the export turnover by the legislature is to be adopted while understanding the meaning of the total turnover, when the total turnover includes export turnover. If wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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