TMI Blog2010 (9) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany engaged in the business of manufacturing and exporting granite slabs and monuments. The assessee company had reported its sales under four categories. 1) Direct Exports 2) Exports through third party 3) Inter Unit Transfers 4) Domestic tariff area sales. 3. In respect of direct exports, third party exports and sales to other export units the assessee has claimed deduction under the provisions of sec. 10B of the Income-tax Act 1961. 4. The Assessing Officer straightaway allowed the deduction claimed by the assessee in respect of direct exports. In respect of remaining two, the third party exports and sales to other exports units, the Assessing Officer declined to grant deduction on the ground that the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well. This issue was considered by the ITAT - A Bench, in the case of TATA Elxsi Vs. ACIT, 115 TTJ 423. Relying on the judgment of the Hon ble Bombay High Court in the case of CIT Vs. Sudharshan Chemicals Industries Ltd, the Tribunal held that these items are necessarily to be reduced from the export turnover but the Tribunal has accepted the alternate contention of the assessee. The Tribunal held that if such expenses are reduced from the export turnover, correspondingly, the same should be reduced from the total turnover as well. Following the above judgment of the Tribunal, we accept the alternate contention of the assessee and direct the Assessing Officer to reduce such foreign currency expenditure from the total turnover also. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come to the conclusion that the assessee cannot claim the deduction u/s 10B in respect of the so called exports made through third parties/export houses. 10. Without prejudice to the above legal conclusion, we also find that the assessee has not explained the factual background in a consistent manner, which would at least prompt the Assessing Officer to examine whether the assessee is entitled for such benefit at all. We have gone through the detailed assessment order passed in this case. The Assessing Officer has listed the names of 398 parties who are according to the assessee export houses and to whom the assessee had made sales for the purpose of exporting the goods out of India. The total of such sales comes to ₹ 18,92,92,177 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transactions have established a clear and speaking nexus with the sales made by the assessee to those parties. 11. Therefore, it is very difficult for us to digest that all the 398 parties are export houses that they have exported those goods earmarked and sold by the assessee company and they have not claimed the benefit of sec. 10B and for that matter, they have not claimed any other benefits entitled for exporters. When all these essential factual matters are unexplained, it is impossible to consider the contention of the assessee for exemption u/s 10B, even for the sake of an academic discussion. 12. Therefore, this contention of the assessee regarding exemption u/s 10B vis- -vis export through export house is dismissed. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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