TMI Blog2013 (1) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 (9) TMI 7 - SUPREME COURT] wherein held that if assessee is doing export business exclusively hence “export turnover & total turnover” would be identical, if the entire sale proceeds are brought into India in convertible foreign exchange within the prescribed time limit - against revenue . Exclusion of expenditure incurred on account of insurance, internet charges, telephone charges, from the term “export turnover” for the purpose of computation of relief u/s 10A - Held that:- this ground is misconceived, as the Commissioner (Appeals) has directed that the expenditure in question are required to be reduced both from export turnover as well as from total turnover in line with the judgment of Gem Plus Jewellery India Ltd [2010 (6) TMI 65 - BOMBAY HIGH COURT] - appeal decided in favour of assessee. - ITA No. 5787/Mum./2009 - - - Dated:- 7-10-2011 - SHRI R.V. EASWAR, AND SHRI J. SUDHAKAR REDDY, JJ. Revenue by: Mr. Jitendra Yadav Assessee by: Mr. Nitesh Joshi O R D E R PER J. SUDHAKAR REDDY, A.M. This appeal preferred by the Revenue, is directed against the impugned order dated 27th August 2009, passed by the Commissioner (Appeals)-XI, Mumbai, for ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of borrowing monies for the business. The assessee s business is in the export of jewellery and in the first page of the assessment order it has been stated by the Assessing Officer that the assessee is a 100% export oriented undertaking within the meaning of section 10B. If that is the factual position, the interest has to be considered as having been derived from the export of the articles. Even if it is argued that the immediate source of the interest is the deposits with the banks and not the export of articles, in view of sub-section (4) of section 10B the assessee is entitled to succeed. The Assessing Officer has not assessed the interest under the head Income from other sources . He has treated the interest as part of the profits of the assessee s business. Sub-section (4) of section 10B statutorily prescribes a formula as to what should be considered as profits derived from export of articles. The profits of the business of the undertaking are to be ascertained first and the next step is to bifurcate the same in the same proportion as the export turnover in respect of the articles bears to the total turnover of the business carried on by the undertaking. If the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from assessment year 2001-02, has been taken note of. 9. Learned Departmental Representative relied on the following case laws:- Renaissance Jenedry Pvt. Ltd., 101 ITD 380; Miracle Software India Ltd., 45 SOT 203; Gem Plus Jewellery India Ltd., [2011] 330 ITR 0175; Changepond Technologies Pvt. Ltd. v/s ACIT, 119 TTJ 18; 10. We have considering the aforesaid decisions cited by the learned Departmental Representative. We find that in all these cases, the judgment of the Hon'ble Jurisdictional High Court in Gem Plus Jewellery India Ltd. (supra) was not considered as it was not available. The provisions of section 10A was considered in this case and at Paras-4 to 6, the Hon ble Court held as follows:- 4. Under sub-s. (1) of s. 10A a deduction is allowed from the total income of the assessee of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years commencing from the assessment year relevant to the previous year in which the undertaking begins manufacture or production. Sub-s. (4) of s. 10A provides the manner in which the profits derived from the export o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while freight and insurance charges are liable to be excluded in computing export turnover, a similar exclusion has not been provided in regard to total turnover. The submission of the Revenue, however, misses the point that the expression "total turnover" has not been defined at all by Parliament for the purposes of s. 10A. However, the expression "export turnover" has been defined. The definition of "export turnover" excludes freight and insurance. Since export turnover has been defined by Parliament and there is a specific exclusion of freight and insurance, the expression "export turnover" cannot have a different meaning when it forms a constituent part of the total turnover for the purposes of the application of the formula. Undoubtedly, it was open to Parliament to make a provision to the contrary. However, no such provision having been made, the principle which has been enunciated earlier must prevail as a matter of correct statutory interpretation. Any other interpretation would lead to an absurdity. If the contention of the Revenue were to be accepted, the same expression viz. 'export turnover' would have a different connotation in the application of the same formu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t into India The above circular indicates vide para 4 of the circular that s. 80HHC(3) statutorily fixes the quantum of deduction on the basis of a proportion of business profits under the head "profits and gains of business or profession" irrespective of what could strictly be described as profits derived from export of goods out of India. Even in cl. 9 the illustration given indicates that the ratio mentioned in sub-s. (3) has to be applied to business profits computed under the provisions of ss. 28 to 43D of the IT Act. This circular supports the reasoning given by us in our judgment hereinabove. For the above reasons, we allow this civil appeal by setting aside the impugned judgment of the High Court with no order as to costs. We make it clear that our reasoning is strictly applicable to the law as it stood during the relevant assessment year. [emphasis own] 12. These judgments of the Hon'ble Jurisdictional High Court as well as the Hon'ble Supreme Court confirm the view of the Tribunal in M/s. Jewelex International P. Ltd. (supra). Thus, we respectfully follow the same and uphold the findings of the Commissioner (Appeals) and dismiss the grounds no.2 and 3 raised by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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