Case Law Details
Pentasoft Technologies Ltd Vs ITO (ITAT Chennai)
ITAT Chennai held that while computing deduction under section 10A of the Income Tax Act expenses deducted from export turnover needs to be deducted from total turnover.
Facts- The first issue involved here is assessment of income from sale of course material under the head ‘income from other sources’. The AO assessed income from course material under the head ‘income from other sources’ and also denied deduction claimed u/s.10A of the Act, on the ground that the receipts are not in the nature of profits & gains derived from export unit.
The next issue that came up for our consideration is depreciation on non-compete fee. AO has disallowed depreciation on non-compete fee on the ground that the non-compete fee/good will is not depreciable asset, eligible for depreciation u/s.32(i)(ii) of the Act.
Another issue is is exclusion of software development expenses and exchange fluctuation loss from export turnover but not from total turnover. The AO while re-computing deduction u/s.10A of the Act, excluded expenditure incurred towards software development expenses as per Explanation (2) to sec.10A of the Act, and exchange fluctuation loss, but does not exclude same from total turnover.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
