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2018 (12) TMI 1806 - AT - Income TaxExemption u/s 10A - other income as eligible for exemption u/s 10A - HELD THAT:- As decided in Hewlett Packard Global Soft Ltd. [2017 (11) TMI 205 - KARNATAKA HIGH COURT] assessee was entitled to 100% exemption or deduction under Section 10-A of the Act in respect of the interest income earned by it on the deposits made by it with the Banks in the ordinary course of its business and also interest earned by it from the staff loans and such interest income would not be taxable as 'Income from other Sources' under Section 56 of the Act. The incidental activity of parking of Surplus Funds with the Banks or advancing of staff loans by such special category of assessee covered under Section 10-A or 10-B of the Act is integral part of their export business activity and a business decision taken in view of the commercial expediency and the interest income earned incidentally cannot be de-linked from its profits and gains derived by the Undertaking engaged in the export of Articles as envisaged under Section 10-A or Section 10-B of the Act and cannot be taxed separately under Section 56 of the Act. Treating export sale proceeds realized subsequently as part of current year export turnover by CIT-A - HELD THAT:- The finding of the ld. CIT(A) is in accordance with law laid down by the jurisdictional High Court in the case of Wipro Ltd. vs. DCIT [2015 (10) TMI 826 - KARNATAKA HIGH COURT] and nothing was brought to our notice that the judgment of the Hon’ble High Court in the case of Wipro Ltd. (supra) was reversed by the Hon’ble Supreme Court. Accordingly, we do not find any merit in the grounds of appeal filed by the revenue. This ground of appeal is dismissed. Not to set off loss of another eligible 10A unit against the profits of eligible 10A unit for the purpose of computing exemption u/s 10A - HELD THAT:- The decision of the ld. CIT(A) is in accordance with decision of the Hon’ble Supreme Court in the case of CIT vs. Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] held that from a reading of the relevant provisions of Section 10A it is more than clear to us that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the assessee. Though Section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. Reduce telecommunication and insurance expenditure incurred in foreign currency for export of software from both export turnover as well as total turnover - HELD THAT:- As decided in HCL TECHNOLOGIES LTD. [2018 (5) TMI 357 - SUPREME COURT] when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well. Write back of advances given to customers constitute business income or not? - HELD THAT:- This issue is covered in favour of the assessee-company by the decision of the Hon’ble High Court of Karnataka in the case of Hewlett Packard Global Soft Ltd. [2017 (11) TMI 205 - KARNATAKA HIGH COURT]. The grounds of appeal are allowed.
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