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3. Learned counsel for the parties at the outset submitted that substantial question of law Nos. III and V in substance arise for consideration in this appeal.

4. It is submitted by learned counsel for the assessee that assessee had incurred expenditure of Rs.198,17,58,814/- in foreign currency from export turnover when the assessee was engaged in software development and therefore, in view of Explanation 2(iii) to Section 10B of the Act, the term 'export turnover' does not include any expenses incurred in foreign exchange in providing technical services outside India. However, notwithstanding the fact that having found that assessee is engaged in the development of computer software, which would qualify for deduction under Section 10B of the Act, the Commissioner of Income Tax (Appeals) and the Tribunal have failed to appreciate the aforesaid aspect of the matter. It is further submitted that the expression 'export turnover' used in Explanation 2(iii) to Section 10B of the Act does not include trade, telecommunication charges or insurance attributable to delivery of articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services. It is therefore, submitted that the aforesaid expenses could not have been excluded from the export turnover. In support of aforesaid submissions, reference has been made to order dated 26.12.2011 passed by the Assessing Officer in the case of assessee itself for the Assessment year 2009-10, and the expenditure incurred by the assessee towards telecommunication expenses, foreign currency expenses was excluded from the export turnover. The aforesaid order was upheld by the Income Tax Appellate Tribunal vide order dated 11.05.2016 passed in I.T.A.Nos.1328, 1347/bang/2011 and 1391/bang/2013. Thereafter, an order was passed on 31.01.2017 by which the order of the Tribunal was given effect to. It is further submitted that substantial questions of law involved in this appeal are no longer res integra and have been answered by a division bench of this court in I.T.A.No.42/2008 vide judgment dated 20.10.2014. The aforesaid order was upheld by the Supreme Court vide order dated 22.02.2019. Reliance has been placed on decisions of this court in 'COMMISSIONER OF INCOME-TAX, BANGALORE VS. MPHASIS LTD.', (2016) 74 TAXMANN.COM 274 (KARNATAKA) which has been upheld by Supreme Court vide order dated 13.11.2019 passed in SLP(C)No.766/2015. Reference has also been made to decisions of this court in 'COMMISSIONER OF INCOME TAX AND ANR. VS. M/S TATA ELXSI LTD AND ANR.', I.T.A.NO.386, 387 & 388/2015 DECIDED ON 15.02.2016 and 'COMMISSIONER OF INCOME-TAX, BANGALORE VS. RELQ SOFTWARE (P) LTD.', (2015) 53 TAXMANN.COM 78 (KARNATAKA).

a. Freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India.
          or
          expenses,     if       any,        incurred      in    foreign
          exchange      in       rendering            of    services
          (including computer software)        outside
          India


          Explanation        2    -     For     the     removal       of
doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.

8. In the light of aforementioned statutory provisions, the facts of the case in hand may be examined. It is pertinent to note that Commissioner of Income Tax (Appeals) in paragraph 5.2 of the order has taken note of the agreements entered into by the assessee and has reproduced the relevant extracts of the agreement in the tabular form. Thereafter, in paragraph 5.4, the Commissioner of Income Tax (Appeals) has held as follows:

"In the instant case, it is true that the appellant is engaged in development of computer software, which is then exported outside India."

9. Thus, the Commissioner of Income Tax (Appeals) has recorded a categorical finding that assessee is engaged in the development of computer software, which is exported outside India. The aforesaid finding has not been set aside by the Tribunal. Therefore, in view of Explanation 2(iii) to Section 10B of the Act, the expression 'export turnover' does not include any expenses incurred in foreign exchange in providing technical services outside India. The assessee has incurred expenditure of Rs.198,17,58,814/- in foreign currency from export turnover for software development. Similarly, the telecommunication charges attributable to delivery of computer software outside India could not have been excluded from the export turnover in view of Explanation 1(i) to Section 10AA of the Act. It is also noteworthy that Explanation 2 to Section 10AA provides that profits and gains derived from; on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.