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TMI Blog2012 (6) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... ndingly also from the total turnover for the purpose of determining the exemption under section 10B of the I T Act. ii) The learned CIT(A) ought to have considered that the total turnover includes export turnover and adjustments are made to the export turnover to determine exact amount of export turnover. There is no specific provision to reduce such adjustments from the total turnover. iii) The learned CIT(A) has failed to consider that the mere reimbursement of expenses by the importer to the assessee will not change the character of definition of total turnover i.e. the turnover is nothing but consideration received in lieu of transaction of a commodity, therefore, expenditure cannot form the part of turnover. 3. Briefly stated the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (ITA Nos.941 and 942/Bang/2008). The CIT(A) also relied on the order of the Special Bench of the Tribunal in the case of ITO v M/s Sak Soft Ltd. 313 ITR (AT) 353. 6. The revenue being aggrieved is in appeal before us. 7. The representative of the assessee company submitted that the issue under consideration is covered in favour of the company in its own case by the judgement of the Hon'ble Karnataka High Court in ITA No.5029/2009 dated 28th October, 2011. A copy of the judgement of the Hon'ble jurisdictional High Court in assessee's own case is placed on record from pages 74 to 78 of the paper book filed by the assessee company. 8. The learned DR was unable to controvert the submission made by the representative of the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by this Court; ........In section 10A, not only the word 'total turnover' is not defined, there is no clue regarding what is to be excluded while arriving at the total turnover. However, while interpreting the provisions of section 80HHC, the courts have laid down various principles, which are independent of the statutory provisions. There should be uniformity in the ingredients of both the numerator and the denominator of the formula, since otherwise it would produce anomalies or absurd results. Section 10A is a beneficial section which intends to provide incentives to promote exports. In the case of combined business of an assessee, having export business and domestic business, the legislature intended to have a formula to ascertain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the export turnover by the legislature is to be adopted while understanding the meaning of the total turnover, when the total turnover includes export turnover. If what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible. Thus, there is no error committed by the Tribunal in following the judgements rendered in the context of section 80HHC in interpreting section 10A when the principle underlying both these provisions is one and the same". 9.1 The Hon'ble Mumbai High Court in the case of Gem Plus Jewellery India Ltd. (supra), in identical circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission which has been urged on behalf of the revenue is that while freight and insurance charges are liable to be excluded in computing export turnover, a similar exclusion has not been provided in regard to total turnover. The submission of the revenue, however, misses the point that the expression "total turnover" has not been defined at all by Parliament for the purposes of s.10A. However, the expression "export turnover" has been defined. The definition of "export turnover" excludes freight and insurance. Since export turnover has been defined by Parliament and there is a specific exclusion of freight and insurance, the expression "export turnover" cannot have a different meaning when it forms a constituent part of the total turnover fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Sak Soft Ltd. (supra), the assessee was engaged in the business of exporting computer software and claimed deduction u/s 10B of the Act. In completing the assessment u/s 143(3) of the Act, the AO reduced the expenditure incurred in foreign exchange in providing the technical services outside India, from the export turnover without corresponding reduction from total turnover, thereby reducing the deduction claimed by the assessment u/s 10B of the Act. 9.3. In light of the above facts, the Special Bench held as under:- "For the above reasons, we hold that for the purpose of applying the formula under sub-section (4) of section 10B, the freight, telecom charges or insurance attributable to the delivery of articles or things or compute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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