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2017 (6) TMI 1155 - AT - Income TaxDisallowance u/s 10A - exclusion of payments made for import of goods and services from export turnover and exclusion of foreign travel related cost incurred in foreign currency from the export turnover - Held that:- As decided in ITO Vs. Sak Soft Limited [2009 (3) TMI 243 - ITAT MADRAS-D] for the purpose of applying the formula under sub-s. (4) of s. 10B, the freight, telecom charges or insurance attributable to the delivery of articles or things or computer software outside India or the expenses, if any, incurred in foreign exchange in providing the technical services outside India are to be excluded both from the export turnover and from the total turnover, which are the numerator and the denominator respectively in the formula. The appeals filed by the Department are thus dismissed. Disallowance u/s 14A - Held that:- We find lot of force in this argument of Ld. AR and accordingly admitting the additional evidence and direct the Ld. AO to verify the claim of the assessee in this regard and make disallowance accordingly without resorting to Rule 8D of the Rules in these facts and circumstances of the case. W also find lot of force in the arguments advanced by the Ld. AR that in any case, investments yielding taxable income need to be excluded while computing disallowance under Rule 8D of the Rules. However, this finding becomes infructous in view of our earlier directions given herein above. Disallowance u/s. 14A in the computation u/s. 115JB - Held that:- While computing the “Book Profit” of the company under the provisions of section 115JB of the Act; any disallowance made under the normal provisions of the Act also cannot be given effect to for arriving at the “Book Profit” for the purpose of Section 115JB of the Act. Thus we direct the Ld. AO not to make any disallowance u/s. 14A of the Act while computing book profits u/s. 115JB of the Act. Whether disallowance made u/s. 14A of was only on account of disallowance of business expenses of the assessee and thereby correspondingly would only increase the business profit of the assessee which would in turn consequently increase in the claim of deduction u/s. 10A ? - Held that:- The assessee was entitled to exemption u/s. 10A with reference to addition or disallowance of various payments, as the plain consequence of the disallowance and add back made by the Assessing Officer is an increase in the business profits of the assessee and the same to be considered for the purpose of computation of deduction u/s. 10A of the Act. Adopting the similar principles, we are inclined to direct the Assessing Officer to consider the disallowance u/s. 14A r.w.Rule 8D as part of business profit so as to compute deduction u/s. 10A of the Act. Disallowing the fringe benefit tax for the purpose of computing book profits u/s. 115JB - Held that:- We direct the Ld. AO to grant deduction for fringe benefit tax while computing book profit u/s. 115JB of the Act. Accordingly, raised by the assessee is allowed.
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