TMI Blog2010 (3) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... g deduction u/s 10B 2. The CIT(A) ought to have appreciated that there is no provision in section 10B which requires the concerned expenses, which are required to be reduced from the export turnover as per clause(iii) of Explanation 2 to section 10B, to be reduced from the total turnover also. 3. The CIT(A) was not correct in holding that the export of the gods manufactured by the assessee company through third parties amounting to ₹ 13,05,22,177/- claimed as deemed export should not be excluded from the export turnover for the purpose of computing deduction allowance u/s 10B. 4. The CIT(A) failed to appreciate the facts and circumstances under which the AO excluded the deemed exports from the export turnover while computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of Hon ble ITAT, Chennai Bench in the case of California Software Co. Ltd.,(2008) 119 TTJ 842, clause(iii) to Explanation 2 to Sec. 10B(8) defines the term Export Turnover to mean consideration received in respect of export of articles or things or computer software but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India . In this connection, the relevant extract of the decision of the Hon ble ITAT, Chennai Bench with regard to deduction of expenses incurred on freight insurance in India Rupees is reproduced below: On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), I accordingly, direct the AO to exclude the expenditure incurred on freight insurance charges from the total turnover as well . Nothing contrary was brought to our knowledge on behalf of revenue. Under the facts and circumstances, we are not inclined to interfere with the finding of CIT(A), who has rightly held that the expenditure incurred on freight and insurance charges are to be reduced from export turnover as well for the purpose of computing deduction u/s 10B of the IT Act. 3. The next issue is with regards to exclusion of deemed exports amounting to ₹ 13,05,22,177/- for the purpose of calculating deduction u/s 10B. In appeal, the CIT(A) granted relief. We find that the assessee filed declaration from M/s S.K.Interna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port orders from respective overseas customers for export cut and polished granite slabs, titles, slates etc. the above parties placed purchase orders on the assessee along with disclaimer certificates declaring that they will not be claiming export benefit on the third party export sales made by them thereby transferring the same to the manufacturers viz. the assessee and also simultaneously undertaking to indicate the assessee as the 100% EOU manufacturer of the materials being exported in the shipping bills filed with the customs authorities. Copies of purchase orders, invoices, disclaimer certificates, application made for removal of excisable goods for export (form A.R.E 1) shipping bills were produced before CIT(A) to substantiate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Departmental Representative. 5. In view of above, we find it undisputed that identical question of law arising in the assessee s case is similar to that of KPIT Cummins Info-systems (P) Ltd. (supra). So in the interest of justice, we restore this matter to Assessing Officer with a direction to decide this issue in the light of final outcome in the case of KPIT Cummins Info-systems (P) Ltd. (supra) after affording a reasonable opportunity of being heard to the assessee. Since we are restoring this issue in view of our observation above, we are refraining ourselves to comment on the merit of issue on hand. This issue is disposed off as indicated above. 6. In the result, the appeal by the revenue is partly allowed. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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