Case Law Details
DCIT Vs M/s Intel Technology India Ltd. (ITAT Bangalore)- Assessing Officer has by referring to clause (iv) of Explanation 2 to section 10A of the Act, reduced telecommunication expenses/ lease lines charges from the export turnover but did not reduced such charges from the total turnover. On Appeal CIT (A) directed the AO to recompute deduction u/s 10A of the Act after excluding expenditure incurred on up-linking charges out of telecommunication expenses from both export turnover and the total turnover. Revenue has gone in appeal against the order of Honourable ITAT which held as under :-
In the case of Sak Soft Ltd. (supra), the assessee was engaged in the business of exporting computer software and claimed deduction u/s 1oB of the Act. In completing the assessment u/s 143(3) of the Act, the AO reduced the expenditure incurred in foreign exchange in providing the technical services outside India, from the export turnover without corresponding reduction from total turnover, thereby reducing the deduction claimed by the assessment u/s 10B of the Act.
1o.2 In light of the above facts, the Special Bench held as under:-
“For the above reasons, we holdthat for the purpose of applying the formula under sub-section (4) of section 1oB, the freight, telecom charges or insurance attributable to the delivery of articles or things or computer software outside India or the expenses, if any, incurred in foreign exchange in providing the technical services outside India are to be excluded both from the export turnover andfrom the total turnover, which are the numerator and the denominator respectively in the formula. The appeals filed by the department are thus dismissed’.
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