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2020 (12) TMI 1184 - AT - Income TaxDeduction u/s 10A - export revenue subsidy, Miscellaneous income and sundry balances written off as not derived from the business carried on by the Appellant and hence not eligible for deduction - HELD THAT:- As relying on M/S. PRIYANKA GEMS [2014 (3) TMI 938 - GUJARAT HIGH COURT]and M/S. GEM PLUS JEWELLERY INDIA LTD. [2010 (6) TMI 65 - BOMBAY HIGH COURT] once export is made, the profits/losses may arise due to variety of reasons from such export activity. Noticeably, sub-section (4) to Section 10A of the Act explicitly explains the term 'profits derived from the export of particles or things' to mean amount which bears to the 'profits of the business of the undertaking', the same proportion as the export turnover bears to the total turnover of the business carried on by the undertaking. What is required to be determined is 'profits of the business undertaking'. In short, the profits derived from export have been equated with business profits of the undertaking in view of the statutory formula provided in Section 10A(4) of the Act. In view of the statutory formula available for determination of quantum of deduction, the expression 'derived from' used in Section 10A(1) fades into insignificance and the quantum of deduction is required to be determined as per the aforesaid formula provided in Section 10A(4) - considerable weight in the plea advanced on behalf of the assessee for eligibility of deduction of the incidental profits alongwith the export profits for the purposes of Section 10A of the Act. We thus set aside the order of the CIT(A) on the point. The AO is directed to compute the quantum of deduction under s. 10A of the Act in the light of formula provided in Section 10A(4) of the Act - Appeal of the assessee is allowed.
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