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2020 (5) TMI 238 - HC - Income TaxDeduction u/s 10B / 10A - transactions through third parties and inter-unit transfers - Duplication of claim of exemption - HELD THAT:- From perusal of Section 10A of the Act, it is evident that the intention of the legislature is to encourage establishment of export oriented industries with the object of receiving convertible foreign exchange. In order to claim deduction under Section 10A of the Act, the conditions laid down under Section 10A(2) have to be complied with. It is pertinent to mention here that in INTERNATIONAL STONES INDIA P. LTD. [2018 (6) TMI 1478 - KARNATAKA HIGH COURT] a division bench of this court has held that a narrow and pedantic approach cannot be applied in construing the words “by an undertaking” and restricting the benefit under Section 10B of the Act only in respect of direct export of such goods manufactured by such units. The deemed export by the assessee undertaking even through third party who has exported such goods to foreign country and has fetched foreign currency for India still remains a deemed export in the hands of the assessee undertaking also. It is evident that the appellant is entitled to benefit of deduction under Section 10B of the Act in respect of export made to third parties and inter unit transfers. So far as submission made by learned counsel for the revenue that the matter requires factual adjudication and therefore, should be remitted is concerned, suffice it to say that there were in all approximately 40 parties with whom the appellant had entered into 398 transactions. The report of an accountant which is required to be furnished by the assessee along with the return of income, under sub-section (5) of section 10B shall be in Form No. 56G. The aforesaid report has been furnished by the appellants and it is not the case of the revenue the appellants have not furnished the aforesaid report. Besides this, it is pertinent to mention here that the question of duplications in the fact situation of the case does not arise as each person can claim only on the value addition by him and the presumption that there can be duplication is contrary to the principle of computation of the income under the Act.
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