TMI Blog2015 (10) TMI 2428X X X X Extracts X X X X X X X X Extracts X X X X ..... ing certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. - Decided in favour of assessee - ITA No.691/Bang/2013 - - - Dated:- 24-9-2015 - SHRI VIJAYPAL RAO, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER For The Appellant : Shri Saravanan, JCIT For The Respondent : Shri Madhukar Dhakappa, C.A ORDER PER SHRI VIJAYPAL RAO, JUDICIAL MEMBER : This appeal by the Revenue is directed against the order dated 6/3/2013 of Commissioner of Income-tax (Appeals) - III, Bangalore for the assessment year 2008-09. 2. The Revenue has raised the following grounds: i. On the facts and in the circumstances of the case the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said expenditure from the total turnover as well while computing the deduction u/s 10A by following the decision of Hon ble Jurisdictional High Court in the case of Tata Elxsi, 349 ITR 98. At the outset we note that this issue is now covered by the decision of Hon ble Jurisdictional High Court in the case of Tata Elxsi (Supra), the relevant finding of the Hon ble jurisdictional High Court reads as follows:- ..Section 10A is enacted as an incentive to exporters to enable their products to be competitive in the global market and consequently earn precious foreign exchange for the country. This aspect has to be borne in mind. While computing the consideration received from such export turnover, the expenses incurred towards freight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assxcessee, whereas in section 10-A, the export profit is to be derived from the total business of the undertaking. Even in the case of business of an undertaking, it may include export business and domestic business, in other words, export turnover and domestic turnover. To the extent of export turnover, there would be a commonality between the numerator and the denominator of the formula. If the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, having export business and domestic business, the Legislature intended to have a formula to ascertain the profits from export business by apportioning the total profits of the business on the basis of turnovers. Apportionment on the basis of turnover was accepted as a method of arriving at export profits. In the case of section 80HHC, the export profit is to be derived from the total business income of the assessee, whereas in section 10A, the export profit is to be derived from the total business of the undertaking. Even in the case of business of an undertaking, it may include export business and domestic business, in other words, export turnover and domestic turnover. The export turnover would be a component or part of a denomi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible. If that were the intention of the Legislature, they would have expressly sated so. If they have not chosen to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the Legislature to the export turnover is to be respected and given effect to while interpreting the total turnover which is inclusive of the export turnover. Therefore, the formula for computation of the deduction us 10A, would be as under: Profits of the business ..... X X X X Extracts X X X X X X X X Extracts X X X X
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