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Issues involved: The judgment involves issues related to deduction u/s 10B of the Income-tax Act 1961, specifically concerning sales made to other export units and through third parties, as well as the treatment of expenditure incurred in foreign currency.
Deduction of expenditure in foreign currency: The Assessing Officer had reduced the expenditure incurred in foreign currency from the export turnover of the assessee without making a corresponding adjustment in the total turnover. The ITAT accepted the alternate contention of the assessee, directing the Assessing Officer to reduce such foreign currency expenditure from the total turnover as well, following a precedent set in a previous case. Claim of exemption u/s 10B for sales to other export units: The ITAT held that sales made to other export units do not qualify for deduction u/s 10B, based on a previous judgment regarding a similar case. The assessee's claim for exemption u/s 10B in this regard was rejected. Deduction u/s 10B for sales through third parties: The ITAT concluded that the assessee cannot claim deduction u/s 10B for sales made through third parties or export houses, based on a precedent case. The judgment emphasized the importance of ensuring no duplication of benefits claimed by multiple parties involved in the export transactions. Factual inconsistencies and lack of evidence: The judgment highlighted the lack of consistent factual background provided by the assessee regarding the export transactions through third parties. The ITAT noted that the assessee failed to demonstrate that the export houses involved did not claim benefits under sec. 10B, leading to the dismissal of the assessee's contention for exemption u/s 10B in this context. Conclusion: The appeals filed by the assessee were partly allowed, with the ITAT ruling in favor of the assessee regarding the treatment of foreign currency expenditure but rejecting the claims for exemption u/s 10B for sales to other export units and through third parties. The judgment was pronounced on September 17, 2010, in Bangalore.
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