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2015 (1) TMI 52 - AT - Income TaxValidity of direction made to AO for re-computation of deduction u/s 10A Exclusion of freight expenses from export turnover and total turnover for computation of deduction Held that:- Following the decision in Income-Tax Officer. Versus Sak Soft Limited [2009 (3) TMI 243 - ITAT MADRAS-D] - it has been held that freight and telecommunication charges which are required to be excluded from export turnover as defined under Explanation 2(iii) of section 10B of the Act should also be excluded from total turnover for the purpose of computing relief allowable u/s 10B thus, the order of the CIT(A) is upheld Decided against revenue. Treatment of subsidy received by the assessee as income Held that:- The assessee in the course of assessment proceedings appears to have agreed for the addition in respect of subsidy received by it - assessee never denied that he has not agreed for the addition - the assessee could not establish as to why the subsidy received by it is to be treated as capital receipt and not exigible to tax - The assessee has simply stated that the subsidy is received towards electronics and women workmen subsidy and it is a general subsidy - assessee himself states that it is not received in respect of any particular asset - subsidy received by the assessee cannot be treated as capital receipt the order of the CIT(A) is upheld on the issue of bringing to tax the subsidy received by the assessee Decided against assessee. Denial of deduction u/s 10A - Sale proceeds in foreign exchange not brought into India within six months from the end of the financial year Held that:- Assessee received sale proceeds to the extent of ₹ 48.28 lakhs after a period of six months from the end of the financial year in which the exports took place - the competent authority is Reserve Bank of India - assessee has not produced any evidence to show that the competent authority has granted extension for receiving sale proceeds beyond six months from the end of the previous year - the claim of the assessee u/s 10A of the Act is rightly disallowed by the lower authorities - the order of the CIT(A) is upheld on the issue of bringing to tax the subsidy received by the assessee Decided against assessee. Interest on debtors and creditors no longer payable written back not considered Held that:- In CIT Vs. Madras Motors Ltd. [2002 (3) TMI 10 - MADRAS High Court] it was held that interest earned by the assessee on belated payments by its customers was directly relatable to its business - There can be no doubt that this interest would however be directly relatable to the business of the assessee of forgings - If the purchasers of the forgings did not make the payments of the forgings and then agree to pay the interest on the delayed payments, the said interest would have its direct nexus with the business of forgings - contentions of the assessee cannot be accepted that this amount is forming part of business income the order of the CIT(A) is upheld in excluding the amount while computing relief u/s 10A Decided against assessee.
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