TMI Blog2007 (6) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... er but not from total turnover, the benefit granted by section 10A would be considerably reduced. This, in our opinion, cannot be the scheme of the Act. In this regard the apex court in the case of K.P. Varghese v. ITO [ 1981 (9) TMI 1 - SUPREME COURT] held that a literal construction that leads to absurdity, unjust result or mischief should be avoided. Similarly the apex court in the case of Bajaj Tempo Ltd. v. CIT [ 1992 (4) TMI 4 - SUPREME COURT] with respect to relief for new industrial undertaking u/s 15C of the Indian Income-tax Act, 1922 has held that such provisions should be construed liberally. Very literal construction which defeats the very purpose of enacting the provision should be avoided. Thus, these expenditures inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer referred to the definition of the export turnover given in section 10A and deducted the said expenditure from the export turnover and not from the total turnover. 4. Upon the assessee' s appeal, the learned Commissioner of Income-tax (Appeals) held that though the total turnover is not defined under section 10A, the same was defined for a similar deduction under section 80HHE wherein the total turnover was defined to exclude the expenditure incurred in foreign exchange as in the case of export turnover. Hence, the learned Commissioner of Income-tax (Appeals) concluded that section 10A is akin to section 80HHE and the deduction can be properly computed only by excluding the expenditure incurred in foreign exchange both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the delivery of the computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India. It further defines total turnover in Explanation (e) as : total turnover' shall not include (i) any sum referred to in clauses (iiia), (iiib) and (iiic) of section 28 ; (ii) any freight, telecommunication charges or insurance attributable to the delivery of the computer software outside India ; and (iii) expenses, if any, incurred in foreign exchange in providing the technical services outside India 8. Thus, it is seen that what is excluded from export turnover is also excluded from total turnover. Now in this case, the learned Commissioner of Income-tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th reference to the definition of the word 'turnover' in other laws like the central sales tax or as defined in accounting principles. Excise duty and sales tax are indirect taxes. They are recovered by the assessee on behalf of the Government. 10. The honourable apex court further held that The principal reason for enacting a formula in section 80HHC of the Income-tax Act, 1961 is to disallow a part of the concession thereunder when the entire deduction claimed cannot be regarded as relating to exports. Therefore, while interpreting the words 'total turnover' in the formula in section 80HHC one has to give a schematic interpretation. The various amendments made therein show that receipts by way of brokerage, comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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