TMI Blog2010 (4) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... rming AO's action in not excluding ₹ 96,39,523/- and ₹ 2,43,763/- towards freight and insurance from the total turnover when the same was excluded from the export turnover while calculating the deduction u/s 10B of the I T Act. 3. Facts in brief are as follows:- Assessee is a company, filed its return of income on 29.11.2006 declaring income from business at NIL after claiming deduction u/s 10B of the Act amounting to ₹ 6,00,00,624/-. The deduction u/s 10B of the Act was computed by the assessee by taking both export turnover and the total turnover at ₹ 21,96,08,918/-. The assessment u/s 143(3) of the I T Act was completed on 29.12.2008 by reducing the assessee's claim of deduction u/s 10B of the Act from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21,35,91,088 = 5,80,77,094 5. Before the first appellate authority, the assessee made the following submissions:- The assessee most humbly submits that the word Total turnover is not defined u/s 10B. However, it has been defined under sub-section 4C Explanation (ba) of Section 80HHC which gives similar deduction from profits derived from export of goods. It states that total turnover shall not include freight or insurance attributable to the transport of the goods or merchandise beyond the customs station as defined in the Customs Act, 1962. Since deduction or incentive to exports provides in both sections 80HHC and 10B are similar in nature, the above cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A copy of judgement is being submitted for your kind perusal. Since the facts and circumstances of the case are totally similar, the judgement is squarely applicable to this case too. 6. The CIT(A), however, deviated from the stand taken by the Special Bench decision of the Tribunal cited supra for the reason that the Special Bench has not considered the issue in the correct perspective and confirmed the Assessing Officer's calculation of deduction u/s 10B of the Act. 7. The learned AR reiterated the submissions made before the authorities below. Per contra, the learned DR strongly relied on the findings and conclusion of the CIT(A). 8. We have heard the rival submission and perused the material placed on record. The issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom tax, the latter gives deduction of a part of the profits and gains of the concerned business from the gross total income. Both, however, are chapters which give relief to assessees from taxation subject to the conditions being fulfilled and in that sense they are of the same genre. The object of these sections is to encourage the earning of foreign exchange and provide incentive to promote exports. If some of the sections such as sections 80HHE and 80HHF provide for a formula for calculating the deduction which is identical with the formula prescribed by section 10B, it would be incongruous to interpret section 10B in a manner different from those two sections merely because there is no definition of total turnover in that section. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; is not defined u/s 44AB of the I T Act, 1961. Hence, this definition is being considered as guiding definition to determine turnover for tax audit. The first appellate authority has adopted the meaning of words stated in section 44AB, which is wholly unnecessary in the instant case and has concluded that turnover and gross receipts are synonym and can be used interchangeably. This line of analysis cannot be applied in this case because gross receipt is used for services rendered by business enterprise or for professional income and word 'turnover' for sales effected or for business income. The assessee's business is wholly of export of manufactured silk fabric and hence word 'gross receipt' cannot be applied to export ..... X X X X Extracts X X X X X X X X Extracts X X X X
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