Income Tax Appellate Tribunal Bangalore Kmg Infotech Private Limited , ... vs Assessee Page 1 of 36 1 ITA Nos.584 to 586/Bang/2010 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH 'B' BEFORE SHRI GEORGE GEORGE K, J.M. AND SHRI A MOHAN ALANKAMONY, A.M ITA Nos.584 to 586/Bang/2010 (Assessment years 200203, 200405 & 200506) M/s KMG Infotech Private Limited, Unit 201/202, Vanguard Rise, 163, Konena Agrahara, Off Airport Road, Bangalore17. Appellant Vs The Assistant Commissioner of Income Tax, Circle11(3), Bangalore. Respondent Appellant by : Shri Padam Khincha, C.A. Respondent by : Shri Etwa Munda, CITIII ORDER PER GEORGE GEORGE K : These three appeals preferred by the assessee are directed against the separate orders of learned CIT(A)I, Bangalore dated 31.12.2009, 1.1.2010 and 2.1.2010 respectively. The asst. years concerned are 200203, 200405 & 200506. 2. Since common issues are involved in these appeals and they pertained to the same assessee, we dispose of the same by this consolidated order for the sake of convenience and brevity. 3. The reliefs sought in these appeals are as follows: Page 2 of 36 2 ITA Nos.584 to 586/Bang/2010 ITA No.584/Bang/2010 (Asst. year 200203) (i) foreign currency expenses incurred onsite for development of computer software be considered as forming part of export turnover and the said expenditure be not reduced from export turnover in the process of computation of deduction u/s 10B; (ii) foreign currency expenses incurred onsite for development of computer software be not regarded as expenses incurred for providing technical services outside India; (iii) in the alternative and without prejudice, if foreign currency expenses incurred onsite for development of computer software be reduced from export turnover, the same be also reduced from total turnover in the process of computation of deduction u/s 10B; (iv) Interest u/s 234B & 234D be deleted. 3.1 ITA No.585/Bang/2010 (Asst. year 200405) (i) deemed exports of Rs.33,70,544/ be regarded as part of export turnover for the purposes of section 10B; (ii) foreign currency expenses incurred onsite for development of computer software be considered as forming part of export turnover and the said expenditure be not reduced from export turnover in the process of computation of deduction u/s 10B; (iii) foreign currency expenses incurred onsite for development of computer software be not regarded as expended incurred for providing technical services outside India; (iv) in the alternative and without prejudice, if foreign currency expenses incurred onsite for development of computer software be Page 3 of 36 3 ITA Nos.584 to 586/Bang/2010 reduced from export turnover, the same be also reduced from total turnover in the process of computation of deduction u/s 10B; (v) interest u/s 234B be deleted. 3.2 ITA No.586/Bang/2010 (Asst. year 200506) (i) software expenses of Rs.2,28,159/0 be fully allowed as deduction in computing the income chargeable under the head "profits and gains of business"; (ii) deemed exports of Rs.38,29,511/ be regarded as part of export turnover for the purposes of section 10B; (iii) telecommunication charges of Rs.7,33,288/ be not reduced from export turnover in the process of computation of deduction u/s 10B; (iv) foreign currency expenses incurred onsite for development of computer software be considered as forming part of export turnover and the said expenditure be not