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TMI Blog2016 (4) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... w and facts of the case. 2. On the facts and in the circumstances of the case the learned CIT (Appeals) erred in law in directing the Assessing Officer to exclude the reimbursement of expenses incurred in foreign currency on software development assisting charges and on tour and travelling both from the export turnover as well as from total turnover for the purpose of computation of deduction under Section 10A without appreciating the fact that the statute allows exclusion of such of expenditure only from export turnover by way of specific definition of export turnover as envisaged by sub-clause (4) of Explanation 2 below sub-section (8) of Section 10A and the total turnover has not been defined in this section. 3. For these and other g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plus Jewellery India Ltd. (2011) [330 ITR P. 175 (Bom)] (2010-TIOL- 456-HC-MUM-IT). Interpreting sub-section (4) of section 10A, it is held as under : "Under sub-section (4) the proportion between the export turnover in respect of the articles or things, or as the case may be, computer software exported, to the total turnover of the business carried over by the undertaking is applied to the profits of the business of the undertaking in computing the profits of the business of the undertaking in computing the profits derived from export. In other words the profits of the business of the undertaking are multiplied by the export turnover in respect of the articles, things or, as the case may be, computer software and divided by the total tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of freight and insurance charges. The submission which has been urged on behalf of the 5 IT (T.P) A No.392/Bang/2013 revenue is that while freight and insurance charges are liable to be excluded in computing export turnover, a similar exclusion has not been provided in regard to total turnover. The submission of the revenue, however, misses the point that the expression "total turnover" has not been defined at all by Parliament for the purposes of s.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 Parliament and there is a specific exclusion of freight and insurance, the expression "export turnover" cannot have a di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any, incurred in foreign exchange in providing the technical services outside India are to be excluded, both from the export turnover and from the total turnover, which are the numerator and the denominator respectively in the formula....." The formula for computation of the deduction under section 10A would be as under : Profits of the business x export turnover / Total turnover From the aforesaid judgments, what emerges is that, there should be uniformity in the ingredients of both the numerator and the denominator of the formula, since otherwise it would produce anomalies or absurd results. Section 10A is a beneficial section. It is intended to provide incentives to promote exports. The incentive is to exempt profits relatable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, though there is no definition of the term 'total turnover' in section 10A, there is nothing in the said section to mandate that, what is excluded from the numerator that is export turnover would nevertheless form part of the denominator. Though when a particular word is not defined by the legislature and an ordinary meaning is to be attributed to the same, the said ordinary meaning to be attributed to such word is to be in conformity with the context in which it is used. When the statute prescribes a formula and in the said formula, 'export turnover' is defined, and when the 'total turnover' includes export turnover, the very same meaning given to the export turnover by the legislature is to be adopted while understanding the mean ..... X X X X Extracts X X X X X X X X Extracts X X X X
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