M/s.Cerner Healthcare Solutions Pvt. Ltd. LevelIII, 'Prestige Obelisk', Kasturba Road, Bangalore. ... Respondent PAN:AACCC 3795 R Appellant by: Dr. P.K.Srihari, Addl.CIT. Respondent by: Shri Chavali S. Narayan, CA. Date of hearing : 05/01/2016 Date of pronouncement: 08/01/2016. O R D E R Per N.V.VASUDEVAN, JM: This is an appeal by the Revenue against the order dated 28.2.2012 of CIT(A)I, Bangalore, relating to AY 200708. 2. Grounds No.1, 9 & 10 raised by the revenue in this appeal are general in nature and does not call for any specific adjudication. IT(TP)A No.675/Bang/2012 M/s.Cerner Healthcare Solutions Pvt.Ltd. Page 2 of 18 3. Ground No.2 to 4 raised by the Revenue relates to one and the same issue, viz., computation of deduction u/s.10A of the Income Tax Act, 1961 (Act). The assessee is a company primarily engaged in the software development and testing services in healthcare sector. The Assessee was entitled to claim deduction u/s.10A of the Act on profits derived from the business of export of computer software. Sec.10A(4) provides that profits derived from export of computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of computer software bears to the total turnover of the business carried on by the undertaking. Expln.(2) to Sec.10A of the Act defines Export turnover to mean the consideration in respect of export by the undertaking of computer software received in, or brought into, India by the Assessee in convertible foreign exchange, but does not include freight, telecommunication charges or insurance attributable to delivery of the computer software outside India or expenses, if any, incurred in foreign exchange in providing technical services outside India. 4. In computing the deduction, the assessee had not reduced telecommunication expenses of Rs.2,84,24,850/ and expenses incurred in foreign currency of Rs.3,86,21,949/ from the export turnover, as according to the Assessee, no part of the expenditure was attributable to the delivery of software outside India or for providing technical services outside India. The IT(TP)A No.675/Bang/2012 M/s.Cerner Healthcare Solutions Pvt.Ltd. Page 3 of 18 Assessing Officer, however, proceeded to recompute the deduction by reducing the said amounts from export turnover as according to the AO, those expenses have to be excluded from the Export turnover in view of the definition of export turnover given in Expln.(2) to Sec.10A of the Act. The AO did not however reduce the said sums from total turnover and thereby allowed the 10A deduction to the extent of Rs.6,01,16,662 as against a much higher claim of deduction u/s.10A of the Act, made by the Assessee . 5. The assessee's submission was that no part of the above expenditure was attributable to the delivery of software outside India or for providing technical services outside India. In the alternative, if the same is reduced from export turnover, it should also be reduced from total turnover. The alternative submission was supported by the decision of the Hon'ble High Court of Karnataka in CIT v. Tata EIxsi Ltd [2012] 349 ITR 98 (Karn). The CIT(A) allowed the alternative claim made by the Assessee by following the decision of the Hon'ble Karnataka High Court in the case of Tata Elxsi (supra). Aggrieved by the order of the CIT(A), the revenue has raised ground No.2 to 4 in this appeal before the Tribunal. 6. We have heard the rival submissions. As far as the alternative claim is concerned, we find that the Hon'ble High Court of Karnataka in the case of Tata EIxsi Ltd (supra) has held IT(TP)A No.675/Bang/2012 M/s.Cerner Healthcare Solutions Pvt.Ltd. Page 4 of 18 that while computing deduction under section 10A of the Income Tax Act, 1961