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The Tax Publishers2020 TaxPub(DT) 2638 (Karn-HC) INCOME TAX ACT, 1961
Section 10A
Tribunal was justified in directing AO to exclude telecommunication expense, per diem expenses, expenses were incurred on insurance in respect of the employees of the assessee on visit to their clients premises, the same also deserves to be excluded, however, there was a dispute with regard to claim of assessee with regard to expenditure incurred on insurance to the tune which requires adjudication, therefore appeal of Revenue was dismissed.
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Deduction under section 10A - Computation of total turnover - Treatment of amount excluded from export turnover -
Assessee was engaged in the business of development and export of computers. The case was reopened under section 147 on the ground that assessee while computing deduction under section 10A had adopted total turnover and had not excluded data communication expenses, which resulted in excess deduction under section 10A. AO held that technical service for delivery of computer software of the nature provided by assessee was methodical, mechanical, procedural, practical, scientific and technological, which cannot be provided by any lay man without special training for doing so. Held: The issue was no longer res integra and was squarely covered by decision of the supreme court in 'CIT V. HCL TECHNOLOGIES LTD.' [(2018) 404 ITR 719 (SC) : 2018 TaxPub(DT) 2138 (SC)]. Tribunal was justified in directing AO to exclude telecommunication expense, per diem expenses. It was pertinent to note that in case expenses are incurred on insurance in respect of the employees of the assessee on visit to their clients premises, the same also deserves to be excluded. However, there was a dispute with regard to claim of assessee with regard to expenditure incurred on insurance to the tune which requires adjudication. Accordingly, substantial question of law framed was answered against the revenue insofar as it pertained to exclusion of expenses under the head of telecommunication and per diem expenses
Followed:CIT v. HCL Technologies Ltd. (2018) 404 ITR 719 (SC) : 2018 TaxPub(DT) 2138 (SC) Income Tax Officer. v. Sak Soft Ltd. (2009) 313 ITR (AT) 353 (Chen) : 2009 TaxPub(DT) 1533 (Chen-Trib)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2002-03
INCOME TAX ACT, 1961
Section 37(1)
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