Insurance & Travelling Expenses incurred in Foreign Currency needs to be Excluded from both Export and Total Turnover for the purpose of section 10A Calculations
As regards portion of the expenses incurred in foreign exchange towards insurance, travelling and communication is concerned, in the case of CIT vs. Tata Elxsi (349 ITR 98), the Hon’ble Jurisdictional High Court held that the same is required to be reduced from export turnover as well as total turnover. Respectfully following the ratio of the decision of the Hon’ble jurisdictional High Court we direct that expenses incurred in foreign exchange towards insurance, travelling and communication are to be reduced both from export turnover as well as total turnover.
ITAT also given its verdict on Transfer Pricing matter related to suitability of Comparable selected by revenue and Asssessee.
ITAT Judgment is as follows :-
These are the appeals filed by the assessee company as well as the revenue directed against the order of learned CIT(A)-IV, Bengaluru dated 20.11.2012 for the assessment year 2008-09.
2. Briefly the facts of the case are that the assessee company is a wholly owned subsidiary of Sunquest Information Systems Inc., USA, and is engaged in the business of providing software services to its Associate Enterprises (AE). The assessee company filed its return of income for the assessment year 2008-09 on 30.09.2008 declaring total income of Rs.2,25,47,548/- under the provisions of MAT and Rs. 1,43,060/- under the normal provisions of the Act. The said return of income was taken up for scrutiny assessment after the issue of requisite notice under section 143(2) of the Act, during the course of the assessment proceedings, the AO noticed that the assessee company reported the following international transactions:
