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M/s. Unicorn Natural Products Limited. Versus DCIT, Circle 3 (3) Hyderabad

2015 (10) TMI 1618 - ITAT HYDERABAD

Computation of deduction u/section 10B - Held that:- The company has maintained and submitted separate set of audited accounts for the export unit, non export trading activity and consolidated accounts for the entire entity, whereas we find that the AO has not taken into account and has got confused between the total turnover of the business and total turnover of the undertaking. The CIT (A) also confirmed the same. We find that in the proviso to section 10B refers to computation of total income .....

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Vijayaraghavan, JM,JJ. For the Appellant : Shri Nitish Grover For the Respondent : Shri Rajat Mitra, DR ORDER Per Smt. Asha Vijayaraghavan, JM This is an appeal preferred by the assessee against the order of the ld CIT (A)-II Hyderabad, dated 13.10.2014 relating to A.Y 2010-11. 2. Briefly stated, the assessee is engaged in the business of manufacture, trading and export of natural products. Assessee filed its return of income for A.Y 2010-11 on 12.10.2010 admitting income of ₹ 48,85,370. .....

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e to be considered. The ld Counsel for the assessee submitted the figures pertaining to both the Units as per the annual reports as under: Description EOU Unit Trading Unit Total Turnover 7,95,41,956 6,83,84,266 14,79,26,222 Profits 52,35,364 (profit as per 56G of ₹ 51,02,162) 41,20,029 93,55,393 4. It was further submitted by the ld Counsel that the assessee has two units, one is a manufacturing unit and the other is a trading unit. The EOU is engaged in the business of processing and exp .....

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Turnover of EOU Unit Exports + Domestic Turnover of EOU Unit 5. The ld CIT (A) held as under: "The CBDT vide Circular No.7 dated 16.07.2013 clarified the issue as under: 5. From the above it is evident that irrespective of their continued placement in Chapter III, section 10A and 10B as substituted by Finance Act, 2000 provide for deduction of the profits and gains derived from the export of articles or things or computer software for a period of 10 consecutive assessment years beginning w .....

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classified under the following heads of income and computed in accordance with the provisions of Chapter IV of the Act- • Salaries • Income from house property • Profits and gains of business and profession • Capital gains • Income from other sources 5.2 The income computed under various heads of income in accordance with the provisions of Chapter IV of the IT Act shall be aggregated in accordance with the provisions of Chapter VI of the IT Act, 1961. This means that fi .....

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isions of section 72 of the Act) and the same is eligible for deduction in accordance with the provisions of Chapter VI-A or section 10A, 10B etc. of the Act, the same shall be allowed in computing the total income of the assessee". Therefore, the principle adopted by the AO is correct. Keeping in view the above directions, the AO is directed to recomputed the deduction u/s 10B. 5. In the result the appeal is partly allowed". 6. Aggrieved, assessee is in appeal before us. The ld Counse .....

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duction u/s 10B. The correct way to calculate the deduction u/s 10B is by considering the division-wise profits and the profits attributable to exports. This is also supported by various judicial decisions. 7. Assessee also relied on the decisions of the Madras High Court in the case of M/s Ventura Metal Products (P) Ltd Chennai vs. DCIT Circle III(4) Chennai (Tax Case Appeal No.749 of 2013) and in the case of M/s Sandoz (P) Ltd Mumbai vs. DCIT Circle 7(1) Mumbai (ITAT Mumbai K Bench) in ITA No. .....

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