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TMI Blog2022 (2) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... of Commissioner of Income Tax v. Mphasis Ltd [ 2014 (8) TMI 690 - KARNATAKA HIGH COURT] also confirmed by Supreme court [ 2019 (11) TMI 1383 - SUPREME COURT ] held that 'the expenditure incurred by the Assessee in foreign currency will be includible in the definition of 'export turnover' for the purpose of computing deduction under Section 10B. Decided in favour of the assessee. - T.C.A.No.383 of 2011 - - - Dated:- 14-2-2022 - Hon'ble Mr. Justice R. Mahadevan And Hon'ble Mr. Justice J.Sathya Narayana Prasad For the Appellant : Mrs.V.Pushpa, Junior Standing Counsel For the Respondent : Mr.S.Gopalakrishnan for OL JUDGMENT R.MAHADEVAN, J. This tax case appeal has been filed by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessee in foreign currency will be includible in the definition of 'export turnover' for the purpose of computing deduction under Section 10B of the Act'. 3. For better appreciation, the relevant portion of the judgment of the Division Bench of the Karnataka High Court in CIT v. Mphasis Ltd. [(2016) 74 taxmann.com 274 (Karnataka) is extracted below: 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 exch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;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 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 enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Banerjee, learned Additional Solicitor General appearing for the petitioner-Revenue and Mr.Parcy Pardiwala, learned Senior Counsel appearing for the respondent, are in agreement that SLP (C) No.2373/2015 preferred by the Revenue in respect of connected ITA No.196 of 2009 which was disposed of by the very same common order dated 01.08.2014 was 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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