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2016 (8) TMI 254 - ITAT BANGALORE

2016 (8) TMI 254 - ITAT BANGALORE - TMI - Deduction u/s. 10B - Held that:- considered the decision of Hon'ble High Court of Karnataka in CIT v. Yokogawa India Ltd. (2011 (8) TMI 845 - Karnataka High Court) wherein it has been held that relief u/s. 10A of the Act is to be computed prior to giving effect to carry forward and set off provisions of the Act. The Hon’ble High Court in paras 10 to 20 of its judgment dealt with this issue and noticed that section 10A(1) of the Act is in pari materia wit .....

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H COURT ] and the subsequent decision in CIT & DCIT v. Motor Industries Co. Ltd. (2015 (7) TMI 876 - KARNATAKA HIGH COURT) and directed the AO to allow the assessee’s claim for reducing the expenditure incurred in foreign currency not only from the export turnover, but also from the total turnover.nothing was brought on record before us to the effect that the decision of the Hon'ble High Court of Karnataka has been reversed /modified by the Hon’ble Supreme Court, even though it is claimed that S .....

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For The Revenue : Shri Sunil Kumar Agarwala, Jt. CIT(DR) For The Assessee : Shri Vishnu Moorthi, CA ORDER Per Bench The appeals are by the revenue against the common order of the CIT(Appeals)-2, Bengaluru dated 28.04.2015 for the assessment years 2007-08, 2008-09 and 2010-11. The assessee has filed Cross Objection against the very same order of the CIT(Appeals) for the assessment year 2007-08. These appeals and the CO were heard together and they are disposed of by this consolidated order. 2. Th .....

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il for the AY 2007-08, for the AY 2008-09 MAT income has been determined at ₹ 1,76,79,341 and for the AY 2010-11 at ₹ 9,59,428 under the normal provisions of the Act. 3. Aggrieved by the order of the Assessing Officer, the assessee preferred appeals for all the three assessment years before the CIT(Appeals). Since the issues involved were common, the CIT(A) has passed a common order. 4. With respect to deduction u/s. 10B, the facts are that the AO for the respective assessment years .....

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ental expenses such as freight and insurance amounting to ₹ 94,56,501 and ₹ 61,896 aggregating to ₹ 95,18,397 only from the export turnover and restricted the deduction available u/s. 10B in addition to the deduction of ₹ 15,83,375 from the profits for calculating the deduction u/s. 10B of the Act. 6. The CIT(Appeals) after considering the submissions made by the ld. AR for the assessee, held as regards setting off of brought forward losses that the issue is covered by th .....

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f Hon'ble High Court of Karnataka in the case of Tata Elxsi Ltd. v. ACIT, 349 ITR 98 wherein it has been held that where certain expenses are excluded from the export turnover for the purpose of calculating deduction admissible under the Act, such expenses should also be excluded from the total turnover, as the export turnover forms part of the total turnover. The CIT(A) also relied on the subsequent decision of the Hon'ble High Court of Karnataka in the case of CIT & DCIT v. Motor I .....

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CIT(A) has erred in directing the AO to exclude the expenditure incurred in foreign currency from both export turnover as well as from total turnover by placing its reliance on the case of Tata Elxsi Limited v. ACIT ((349 ITR 98) ) without appreciating that there is no provision in section 10B that such expenses should be reduced from the total turnover, as clause (iv) of the Explanation to section 10A provides that such expenses are to be reduced only from the export turnover. 4. For these and .....

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aterial on record and also considered the decision of Hon'ble High Court of Karnataka in CIT v. Yokogawa India Ltd. (supra) wherein it has been held that relief u/s. 10A of the Act is to be computed prior to giving effect to carry forward and set off provisions of the Act. The Hon ble High Court in paras 10 to 20 of its judgment dealt with this issue and noticed that section 10A(1) of the Act is in pari materia with section 10B of the Act. Hence, we are convinced that the CIT(Appeals) was ri .....

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