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2014 (11) TMI 604 - AT - Income TaxRe-computation of deduction u/s 10A – Insurance and commission expenses - Whether CIT(A) was correct on facts and circumstances of the case and in law in deleting the reduction in respect of Insurance & Commission expenses and on account of expenses incurred in foreign currency, both from the ‘export turnover’, for the purpose of recomputing the deduction u/s 10A – Held that:- The assessee had not incurred various expenses in foreign exchange for providing Technical services outside India - when the expenses were not included in export turnover, there was no question of exclusion of the same from the export turnover - the communication expenses were related to domestic usage and there was no nexus with export of services. Explanation 2(iv) to sec. 10A of the Act provides that freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the Technical services outside India not to be included in export turnover – in CIT Vs Gem Plus Jewellery India Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT] the same has been decided - since export turnover has been defined by Parliament and there is a specific exclusion of freight and insurance, the expression “export turnover” cannot have a different meaning when it forms a constituent part of the total turnover for the purposes of the application of the formula - A construction of a statutory provision which would lead to an absurdity must be avoided. Moreover, a receipt such as freight and insurance which does not have any element of profit cannot be included in the total turnover - Freight and insurance do not have an element of turnover – the order of the CIT(A) is upheld – Decided against revenue.
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