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2014 (10) TMI 257 - KARNATAKA HIGH COURTDeduction u/s 80HHC - Computation of total turnover - Non-inclusion of excise duty and sales tax Held that:- Following the decision in Commissioner of Income-Tax vs Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME Court] - The intention was to exempt profits relatable to exports - Just as interest, commission, etc., do not emanate from the "turnover" so also excise duty and sales tax do not emanate from turnover - Since excise duty and sales tax did not involve any turnover such taxes had to be excluded - excise duty and sales tax also cannot form part of the "total turnover" under section 80HHC(3)" Decided against revenue. Receipts from sale of scrap Held that:- Following the decision in Commissioner of Income-Tax vs- Punjab Stainless Steel Industries & Others [2014 (5) TMI 238 - SUPREME COURT] it has been held that the raw material, which is not capable of being used for manufacturing the goods will have to be either sold as scrap or might have to be re-cycled of disposed of to someone who would re-cycle the scrap - when such scrap is sold, the sale proceeds of the scrap cannot be included in the term "turnover" - the proceeds of sale of such scrap would not be included in "sales" in the profit and loss account of the assessee. 90% of the fees received from Robert Bosch Held that:- Following the decision in Commissioner of Income-tax Versus Motor Industries Co. Ltd. [2010 (8) TMI 333 - Karnataka High Court] - the assessee was in the business of export of goods and merchandise - The assessee was earning foreign exchange out of that export business - The disputed income was earned by the assessee for its fees towards developmental work from the foreign enterprise - The developmental work was intimately connected with the business of manufacture and sale of goods by the assessee - There was immediate nexus between the activity of export and the developmental work - The consideration received for developmental work was not liable to be deducted under clause (baa) in computing the profits of the business" Decided against revenue.
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