9911796707
TMI Blog2013 (6) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... een reduced u/s. 10A of the I.T. Act on the ground that payments made directly abroad by way of deduction from export receivables on account of agency commission do not form part of export turnover eligible for claiming exemption u/s. 10A of the Act. 3. In alternative and without prejudice to this ground, the assessee has also raised additional ground by which it claims that export turnover in the numerator as the same meaning as the export turnover which is a constituent element of the total turnover in the denominator. 4. The sum and substance of the grievance of the assessee is that if certain item of expenditure are excluded from the export turnover, then the same item should also be excluded from the total turnover. 5. During the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Sec. 10A expenses if any incurred in foreign exchange in providing the services outside India is not included in the 'Export Turnover' for calculating the amount of deduction u/s. 10A. Based on these facts, the AO recomputed the allowable deduction u/s. 10A at Rs. 87,45,136/-. The AO found that the assessee has claimed deduction u/s. 10A at Rs. 1,75,45,047/-. The AO was of the firm belief that the assessee has claimed excess deduction/s. 10A to the extent of Rs. 87,99,911/- and accordingly disallowed the same. 6. The assessee carried the matter before the Ld. CIT(A) but failed to convince the Ld. CIT(A). 7. Before us, the Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. 8. The Ld. Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Parliament and there is a specific exclusion of freight and insurance charges, 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 the 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 revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the expenses from the total turnover. The additional ground of appeal is allowed and ground No. 1 taken with grounds of appeal filed alongwith form No. 36 with all its sub grounds , is dismissed. 14. Ground No. 2 relates to disallowance of depreciation of Rs. 12,80.591/- relating to fixed assets of Wada unit. While scrutinizing the unit-wise break-up of sales and profits, the AO observed that the assessee has given the following break-up. Sales Profit Loss 1. Kandla Unit 23,85,10,567/- 1,75,45,047 2. Wada Unit Nil ----- Rs. 13,15.128/- 15. The AO noticed that the assessee has done no business in Wada unit and yets has shown a loss of Rs. 13,15,128/- which included depreciation of Rs. 12,80,591/-. The AO disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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