DY CIT Vs. SOFTSOL INDIA LTD
INCOME TAX APPELLATE TRIBUNAL
Click here to view full judgement.
Anandi Lal Gehlot, A.M. -
(1.) THIS appeal by the revenue and the Cross-Objection by the assessee are directed against the order dated 15-6-2006 passed by the Commissioner (Appeals)-IV, Hyderabad, for the assessment year 2003-04.
(2.) Effective ground of the revenue in its appeal reads as follows'
1. The learned Commissioner (Appeals) erred in allowing the claim of exemption under Section 10A accepting the claim that the export turnover and total turnover are the same. The term 'Export Turnover' is defined in the Section 10A whereas 'Total Turnover' is not defined. Hence on-site expenditure incurred in foreign exchange cannot be reduced from total turnover. Legislative intention in not defining total turn over for the purpose of Section 10A is clear, so as not to allow deduction of on-site expenditure in foreign exchange from total turnover,
The assessee, through its elaborate grounds raised in the cross-objection, disputed the action of the Commissioner (Appeals) in upholding the exclusion of site expenses incurred in foreign exchange from the Export Turnover.
Brief facts of the case are that the assessee, engaged in the business of developing software, is a 100 per cent EOU. In the assessment, the assessing officer excluded the on site expenditure spent in foreign exchange from the export turnover as per clause (iv) to Explanation 2 of Section 10A of the Income Tax Act. After excluding the same, exemption under Section 10A has been determined at Rs. 98,35,106 by the assessing officer as against the assessee's claim for exemption of Rs. 2,55,85,772. The Commissioner (Appeals), after considering the assessee's submission held that the assessing officer has correctly excluded the expenditure from the convertible foreign exchange received. However, the Commissioner (Appeals) accepted the alternative contention of the assessee that since the assessee's turnover consists only of exports and there being no other turnover, while working out the Export Turnover minus On site expenditure, the 'Total Turnover' also should be taken at the same figure. The revenue is in appeal against the finding of the Commissioner (Appeals) that the site expenditure is required to be excluded from the total turnover also whereas the assessee through its cross-objection is contesting the finding of the Commissioner (Appeals) that the site expenditure is required to be reduced from the convertible foreign exchange received by the assessee for the purpose of calculation of 'Export Turnover'.
(3.) THE learned Authorised Representative submitted that all the details in respect of on-site expenses alongwith copies of the debit notes were filed before the assessing officer. THE on-site expenses related to development of software and on identical set of facts, Hyderabad Bench of the Tribunal, in Patni Telecom (P) Ltd. (Formerly-Cymbal Information Services Ltd.) v. ITO (IT Appeal No. 354 (Hyd) of 2006 for assessment year 2000-01 and IT Appeal No. 5 (Hyd) of 2005 for assessment year 2001-02), vide order dated 11-1-2008 has decided the issue in favour of the assessee. THE learned Departmental Representative, though relied on the order of the assessing officer, has not controverted the contention of the assessee that the facts of the case and the issue involved in these matters are identical and the issue is covered by the above decision of the Tribunal in favour of the assessee.;
Copyright © Regent Computronics Pvt.Ltd.