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TMI Blog2012 (8) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... icer to reduce the miscellaneous income in question from the export turnover as well as the total turnover while computing the deduction under section 10A of the Act. Deduction under section 10A of the IT Act - Setting off of the loss of Mumbai STPI undertaking from the profits of the business of Bangalore STPI - Held that:- As the profits and gains under section 10A were not to be included in the income of the assessee at all, the question of setting off the loss of the assessee from any business against such profits and gains of the undertaking would not arise - as per section 72(2), unabsorbed business loss is to be first set off and thereafter unabsorbed depreciation treated as current year’s depreciation under section 32(2) is to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oning the delay. 2.3 After considering the submissions of both the parties and the materials on record, it appears that the assessee has a reasonable cause in not filing the cross objection within time, since there were changes at the senior management level. We therefore by taking a liberal view, condone the delay and the cross objection is admitted. 3. First we shall decide the appeal of the department. In this appeal, the only relevant ground raised reads as under:- The CIT(A) erred in directing the Assessing Officer to exclude leased line charges amounting to Rs.2,00,03,469/-, half circuit charges amounting to Rs.59,61,635/- and travel expenses amounting to Rs.19,91,910/- from total turnover for the purposes of computation of deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that this issue is covered by the order of the Tribunal in the case of ITO v Sak Soft Ltd. 313 ITR (AT) 353 (Chennai) (SB) in favour of the assessee. 3.5 We have considered the submissions of both the parties and carefully gone through the materials available on record. It is noticed that an identical issue has been decided in favour of the assessee by the Special Bench of ITAT Chennai in the case of ITO v Sak Soft Ltd. 313 ITR (AT) 353 (Chennai) (SB) wherein it has been held as under:- "To say that in the absence of any definition of "total turnover" for the purpose of section 10B, there is no authority to exclude anything from the expression as understood in general parlance would be wrong, as there has to be an element of turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. In the formula prescribed by section 10B(4) the figure of export turnover has to be the same both in the numerator and in the denominator of the formula. It follows that the total turnover cannot include the two items of expenses recovered by the assessee and referred to in the definition of "export turnover" ". 3.6 The aforesaid decision had been considered and affirmed by the Hon'ble jurisdictional High Court in the case of Tata Elxsi Ltd. & Ors. 2011-TIOL-684-HC-KAR-IT wherein it has been held that for the purpose of computation of deduction under section 10A of the Act, if any expenditure is excluded from the export turnover, the same has to be excluded from the total turnover also. A similar view has also been taken by the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot appreciating that the deduction under section 10A of the Income-tax Act, 1961, should be computed with respect to the profits of each undertakings on stand-alone basis, and confirming the action of the Assessing Officer. 4.1 Vide ground no.1, the grievance of the assessee relates to the exclusion of miscellaneous income amounting to Rs.11,35,154/- as part of total turnover for computing deduction under section 10A of the I T Act. 4.2 The facts relating to this issue in brief are that the Assessing Officer during the course of assessment proceedings, noticed that the assessee had shown Rs.11,35,154/- as income from other sources, which had not been received in convertible foreign exchange, he was of the view that the same also needs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng deduction under section 10A of the I T Act. 5.1 The facts in relation to this issue in brief are that the Assessing Officer while working out the deduction under section 10A of the Act, set off the loss of Rs.66,64,539/- of Mumbai Unit against the taxable profit of Rs.49,14,168/- of the Bangalore unit which resulted in a loss under the head "profits and gains of the business or profession". The claim of the assessee was that there was no question for claiming deduction under section 10A of the Act on the loss suffered by the Mumbai Unit and that the assessee was eligible for deduction under section 10A of the Act in respect of the profits and gains from Bangalore unit. The Assessing Officer did not accept the claim of the assessee and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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