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Issues involved: Revenue's claim of failure to consider Ground No.2 raised u/s 10A deduction on profit due to foreign exchange claim.
Consideration of Ground No.2: The revenue raised two grounds for consideration by the Tribunal regarding the disallowance of deduction u/s 10A on profit related to foreign exchange claim and the eligibility of the assessee for the deduction u/s 10A. The Tribunal observed the grievance of the revenue and disposed of the issue in favor of the assessee based on a Special Bench decision which clarified that foreign exchange gain related to export is part of turnover and eligible for deduction under section 80 HHC of the Income Tax Act, 1961. Eligibility for Deduction u/s 10A: The AO allowed the assessee a deduction u/s 10A after excluding the foreign exchange amount. The AO's observation stated that the foreign exchange gain was considered as income derived from business activity, but the AO did not exclude this amount from the eligible deduction under section 10A based on the remand report's facts. The Tribunal upheld the eligibility of the assessee for deduction u/s 10A and dismissed the revenue's claim that the foreign exchange gain should not be part of the eligible income for deduction. Decision and Dismissal: The Tribunal found no mistake in its order as alleged by the revenue in the miscellaneous application. The Tribunal noted that the revenue sought to improve the AO's case, which was not the basis of the assessment. The Tribunal concluded that the issue was well-considered, the Special Bench decision was followed, and the revenue's application lacked merit, leading to its dismissal.
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