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TMI Blog2022 (2) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003-04. 2. By order dated 20.09.2011, this court admitted the aforesaid tax case appeals on the following substantial questions of law: T.C.(A).No.399 of 2011:- "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the expenditure of Rs. 9,49,75,456/- incurred in foreign exchange for providing technical services outside India by way of onsite development of computer software should not be excluded from the export turnover for the purpose of computing deduction under Section 10B without properly applying the provisions of Explanation 2(iii) to Section 10B? T.C.(A).No.400 of 2011:- "Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ?CIT Vs Mphasis Ltd.,? reported in [2016] 74 taxmann.com 274 (Karnataka) is quoted below for ready reference. ? "2. The first substantial question of law arose for consideration before this Court in ITA No.776/2007 disposed of on 13.06.2014, wherein this Court has held at paras 18 and 19 as under :- 18. From the aforesaid provision it is clear that the consideration in respect of computer software received in or brought into India by the assessee in convertible foreign exchange is deducted from the profits of the said business. In other words the assessee is not liable to pay any income tax on such consideration received from export of computer software. However the said export turnover does not include freight, telecommunication charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (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 place outside India by any means. The expenditure incurred in the form of foreign exchange for such services cannot be excluded in computing the export turnover as it forms part of the export turnover. In the instant case as is clear from the order of the Assessing Authority, he proceeds on the assumption that the assessee is a company engaged in rendering technical services outside India in connection with production of said software. Therefore the expenditure incurred in foreign exchange in providing such technical services outside India of Rs. 62.7 lakhs was excluded in computing the export turnover an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax And Another Vs. Tata Elxsi Ltd., reported in (2012) 349 ITR 98 (Karn) . It has been held as under :- "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 10-A 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, having export business and domestic business, the legislature intended to have a formula to ascertain the profits from export business by apportioning the total profits of the business on the basis of turnovers. Apportion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 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 what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed by this Court on 28.01.2019 having taken note similar grounds raised in the special leave petition.
3. Hence taking note of the fact that in respect of common judgment this Court has already dismissed SLP (C) No.2373 of 2015 relating to the Assessment Year 2004-05 and in the present case except that issue relates to Assessment Year 2003-2004 all other aspects are on the very same point, we are not inclined to entertain the instant petition."
3.2 Following the aforesaid judgment, which applies to the facts of the present case, the questions of law are answered in favour of the assessee and against the Revenue.
4. In the result, the Appeals of the Revenue are dismissed as indicated above. No costs. X X X X Extracts X X X X X X X X Extracts X X X X
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