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2019 (4) TMI 1168 - HC - Income TaxComputation of deduction under section 10A - exclusion of expenses incurred in foreign currency, both from the export turnover and total turnover - HELD THAT:- What is excluded from the export turnover must also be excluded from total turnover, since one of the components of total turnover is export turnover. See TATA ELXSI LTD. case [2011 (8) TMI 782 - KARNATAKA HIGH COURT] Setting off of brought forward losses - HELD THAT:- While considering this aspect, the Tribunal relied upon the decision in Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] and held in favour of the assessee Compensation amount received by the assessee on account of termination of export/service contract - whether that income could be treated as business income arising out of export item? - HELD THAT:- This court in M/S. HEWLETT PACKARD GLOBAL SOFT LTD. [2017 (11) TMI 205 - KARNATAKA HIGH COURT ] has held that the interest income derived by the assessee would be eligible for deduction under section 10A of the Act. Likewise, in the case on hand, the compensation/damages received by the assessee on termination of export contract would be in the course of his export business and is to be treated as income derived from out of the business, which qualifies for deduction under section 10A of the Act. Deduction of amount from the export turnover which relates to software supplied to another STP unit - HELD THAT:- The Tribunal while answering the said question held that it is a deemed export, as the export is done through STP unit and foreign exchange is earned. This court in Tata Elxsi Ltd. v. Asst. CIT [2015 (10) TMI 634 - KARNATAKA HIGH COURT] it is clear that if an assessee wants to claim the benefit of section 10A, firstly he must export articles or things or computer software. Secondly, the export may be done directly by him or through other exporter after fulfilling the conditions mentioned therein. Thirdly, such an export should yield foreign exchange which should be brought into the country. If all these three conditions are fulfilled, then the object of enacting section 10A is fulfilled, and the assessee would be entitled to the benefit of exemption from payment of Income-tax on the profits and gains derived by the undertaking from the export .
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