TMI Blog2018 (6) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... export, then Section 10A of the Act is attracted and such exporter is entitled to benefit of deduction of such profits and gains derived from such export from payment of income tax. The finding of the authorities that the assessee has not directly exported the computer software outside country and because it supplied the software to another STP unit, which though exported and foreign exchange received was not treated as an export and was held to be not entitled to the benefit is unsustainable in law. The substantial question of law is answered in favour of the assessee and against the revenue. The appeal is allowed. The impugned orders are set aside. The assessee is held to be entitled to deduction of such profits and gains derived fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is pending in this Court. 2. Both the learned counsel submit that as far as the present ITA No.305/2017 is concerned, the same is covered by the decisions of Hon'ble Supreme Court in M/s. Tata Elxsi Ltd., vs. Asst. Commissioner of Income Tax, decided on 20.10.2015 since reported in (2015) 127 DTR 0327 (Kar) and Commissioner of Income-tax, Central III vs. HCL Technologies Ltd., [2018] 93 Taxmann.com 33(SC). 3. The relevant portion of the judgment of the Division Bench in the case of M/s. Tata Elxsi (supra), is quoted below for ready reference:- 20. From the aforesaid provisions, it is clear that if a assessee wants to claim the benefit of Section 10A, firstly he must export articles or things or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any other EOU/EHTP/STP/BTP unit. What follows from this provision is that to be eligible for exemption from payment of income tax, export should earn foreign exchange. It does not mean that the undertaking should personally export goods manufactured / software developed by it outside the country. It may export out of India by itself or export out of India through any other STP Unit. Once the goods manufactured by the assessee is shown to have been exported out of India either by the assessee or by another STP Unit and foreign exchange is directly attributable to such export, then Section 10A of the Act is attracted and such exporter is entitled to benefit of deduction of such profits and gains derived from such export from payment of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext in which it is used. Hence, what is excluded from export turnover must also be excluded from total turnover , since one of the components of total turnover is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. 18. XXXXXX 19. In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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