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2013 (1) TMI 110 - AT - Income TaxDeduction under section 10A in respect of Bangalore unit (STPI unit) - assessee company had two units, one in Bangalore[STPI unit] and another in Mumbai (Non STPI Unit) - brought forward losses of STPI unit without setting off the carry forward losses as well as the loss of the current year pertaining to Non-STPI unit OR after setting off the unabsorbed loss of the same unit and the current year’s loss of the non-STPI unit - Held that:- As decided in CIT Versus Yokogawa India Ltd. [2011 (8) TMI 845 - KARNATAKA HIGH COURT] deduction u/s 10A/10B is allowable without setting off the non-STPI unit - As the income of 10-A unit has to be excluded at source itself before arriving at the gross total income, the loss of non 10-A unit cannot be set off against the income of 10-A unit u/s 72. Exclusion of telecommunication expenses and travelling expenses incurred in foreign currency from the export turnover & not from the total turnover while calculating deduction u/s 10A - Held that:- As decided in CIT v M/s Tata Elxsi Ltd. & Others [2011 (8) TMI 782 - KARNATAKA HIGH COURT] while computing the exemption u/s 10A, if the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded from the total turnover in the denominator. When the statute prescribed a formula and in the said formula, ‘export turnover’ is defined, and when the ‘total turnover’ includes export turnover, the very same meaning given to the export turnover by the legislature is to be adopted while understanding the meaning of the total turnover, when the total turnover includes export turnover. If what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible. Thus, there is no error committed by the Tribunal in following the judgements rendered in the context of section 80HHC in interpreting section 10A when the principle underlying both these provisions is one and the same - Thus CIT(A) was justified in directing the AO to exclude the above mentioned expenses both from the export turnover as well as from the total turnover while computing deduction under section 10A - in favour of assessee.
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