2021 (11) TMI 216 - AT - Income Tax

Deduction u/s 10A computation - export turnover disallowance - HELD THAT - We find force in the assessee's ground No. (i) to be specific wherein its case is that whatever revenue item is excluded from export turnover, the very course of action applies to the total turnover as well. DR fails to dispute that not only the hon'ble apex court's landmark decision in CIT Vs. HCL Technologies Ltd. 2018 (5) TMI 357 - SUPREME COURT has settled the instant issue but also the CBDT has issued its circular No. 4/2018, dt. 14-08-2018 that such an item; excluded from the export turnover, is not included in the total turnover as well.

Summary

Issues:
1. Appeal against CIT(A)'s order for AY 2009-10 under section 143(3) of the Income Tax Act, 1961.
2. Disallowance of export turnover amounting to ?42,86,17,492 under section 10A of the Act.

Analysis:
1. The appellant challenged the CIT(A)'s order on various grounds, including the computation of deduction under section 10A of the Act. The appellant argued that the CIT(A) erred in adopting only ?6,50,60,398 as "export turnover" and in rejecting additional grounds related to on-site development proceeds of the US Branch. The appellant contended that the on-site development proceeds were credited to a separate bank account outside India with RBI approval, as per Explanation-2 under section 10A(3) of the Act. The appellant also cited RBI circulars and previous DRP orders to support their position.

2. The ITAT, after hearing both parties, considered the appellant's argument that any revenue item excluded from export turnover should also be excluded from the total turnover. The ITAT noted the landmark decision of the apex court in CIT Vs. HCL Technologies Ltd. and a CBDT circular supporting this position. Consequently, the ITAT partially accepted the appellant's plea and directed the Assessing Officer to make the necessary computation in accordance with the law. No other grounds were pursued during the hearing.

3. The ITAT concluded by partly allowing the appellant's appeal for statistical purposes, specifically regarding the disallowance of the export turnover amount. The order was pronounced in open court on 25th October 2021. The judgment provides a detailed analysis of the appellant's contentions, legal precedents, and the ITAT's decision, ensuring a comprehensive review of the issues raised in the appeal.