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TMI Blog2018 (3) TMI 2041X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Consequently, Ground Nos. 3 to 3.2 of the assessee s appeal stands allowed. Nature of expenses - Expenditure on purchase of Random Access Memory Cards for computer equipments - CIT (A) in upholding the action of the AO in treating the purchase of RAM in respect of the computers of the assessee as a capital expenditure - HELD THAT:- As respectfully following the decision of M/s. APL India (P) Ltd [ 2012 (7) TMI 492 - ITAT, MUMBAI] on this issue, the AO is directed to grant the assessee the benefit of the Revenue expenditure in respect of the cost incurred for the purchase of the RAM Memory Cards for the computer equipments. Consequently, Ground Nos. 4 to 4.3 of the assessee s appeal stands allowed. Interest paid on delayed remittance of taxes and provident fund - HELD THAT:- As it is noticed that the issue is squarely covered by the decision of M/s. Messee Dusseldorf India (P) Ltd [ 2009 (12) TMI 1034 - ITAT, DELHI] AO is directed to grant the assessee the benefit of deduction of the interest paid on the delayed payment of the service-tax as the same is compensatory in nature as Revenue expenditure. The disallowance made in respect of the PF Contribution stands upheld a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing technical services outside India without considering the facts of the case and nature of such expenses. 2.3 The Ld. CIT (A) and the Ld.AO have failed to appreciate that services are received by the Appellant from the above mentioned resident service providers and no services have been rendered by the Appellant outside India. 2.4 Without prejudice to the above, the Ld. CIT (A) and the Ld.AO have erred in law and facts by excluding the above expenses only from the export turnover without excluding the same from the total turnover for computing deduction under section 10A of the Act. 2.5 The Ld. CIT (A) failed to apply the order of the jurisdictional tribunal ruling in the Appellant s own case for earlier assessment years, wherein, the Hon ble ITAT has held that items excluded from export turnover needs to excluded from total turnover. Items excluded from profits eligible for deduction under section 10A of the Act 3. Denial of deductions under section 10A of the Act in respect of voluntary disallowances u/s .43B of the Act amounting to INR 82,979,783: 3.1 The Ld. CIT (A) and the Ld.AO have erred in excluding the voluntary disallowance made by the Appellant under section 43B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the issue was against the action of the Ld. CIT (A) in upholding the exclusion from export turnover for deduction u/s. 10A of the Act the help desk service charges and the travelling expenses. It was submitted that in view of the decision of the Hon ble ITAT Special Bench in the case of M/s. Sak Soft Ltd., reported in 30 SOT 55 (Chennai) (SB), the help desk service charges and the travelling expenses having been reduced from the export turnover, the same was liable to be reduced from the total turnover also. 5.1 In reply, the Ld. DR vehemently supported the order of the Ld. CIT(A). 5.2 We have considered the rival submissions. 5.3 As it is noticed that the issue is squarely covered by the decision of the Hon ble ITAT Special Bench (Chennai) in the case of M/s. Sak Soft Ltd., referred to supra, the AO is directed to reduce the help desk service charges and the travelling expenses from the export turnover as also from the total turnover for the purpose of computing the deduction u/s. 10A of the Act. Consequently, Ground Nos. 2 to 2.5 of the assessee s appeal is partly allowed. 6.0 In regard to Ground Nos. 3 to 3.2, it was submitted that the issue was against the action of the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO and the Ld. CIT(A). 7.2 We have considered the rival submissions. 7.3 As it is noticed that the issue is now squarely covered by the decision of the Hon ble ITAT Mumbai Benches in the case of M/s. APL India (P) Ltd., referred to supra, respectfully following the decision of the Hon ble ITAT Mumbai Benches in the case of M/s. APL India (P) Ltd., on this issue, the AO is directed to grant the assessee the benefit of the Revenue expenditure in respect of the cost incurred for the purchase of the RAM Memory Cards for the computer equipments. Consequently, Ground Nos. 4 to 4.3 of the assessee s appeal stands allowed. 8.0 In regard to Ground Nos. 5 to 5.2, it was submitted that the issue was against the action of the Ld. CIT (A) in upholding the disallowance of the interest expenditure on delayed payment of service tax and PF contribution u/s. 37 of the Act. It was a submission that in respect of the PF contribution the assessee was not pressing the ground. It was a submission that the interest expenditure on the delayed payment of the service tax had been treated penal in nature by the AO and the Ld. CIT(A). It was a submission that the same was compensatory in nature as has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t have been set aside to the AAR. It was a submission that both on behalf of the assessee and the Revenue that they had no objection, if the issue was restored to the file of the AO for readjudication after awaiting the final decision in respect of the AAR. 9.1 We have considered the submissions. 9.2 As the issue, whether the payment to GTE-OC in respect of employee deputed to the assessee was reimbursement or not and as to whether the said employee had provided any technical services or was providing managerial services are issues in dispute. Though, the assessee has submitted that it has deducted TDS u/s. 192 of the Act. The dispute would also centre on, whether the TDS liable to be made u/s. 195 of the Act. These issues are now pending before the Hon ble Supreme Court on account of SLP filed both by the assessee and the AAR against the Writ Petition order of the Hon ble Jurisdictional High Court of Madras. This being so, the issues in regard to this payment made to GTE-OC are restored to the file of the AO for re-adjudication after awaiting final decision in respect of the AAR in the case of the assessee on the issue. Consequently, Ground Nos. 6.1 6.2 are partly allowed for stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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