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TMI Blog2014 (3) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... ver also - The expenditure which was excluded by the Assessing Officer while computing the "export turnover" does not have the element of turnover – thus, it cannot be included in the total turnover also – there is no justification for inclusion of the expenditure which is excluded from export turnover, in the total turnover - Export proceeds not received within six months are also to be excluded from the total turnover on the same principle - Decided in favour of Assessee. - ITA.No.342/Hyd/2013, ITA.No.425/Hyd/2013 - - - Dated:- 19-2-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Petitioner : Mr. P. Murali Mohan For the Respondent : Mr. Solgy Jose T. Kottaram ORDER Per B. Ramakotaiah, A. M. These cross- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsurance charges from total turnover as well. However, he was of the opinion that the export profits not received within six months does not have any statutory bearing and since 'export turnover' is defined in the Act, the same cannot be treated as part of export turnover, while it will continue to be part of total turnover. The learned CIT(A), accordingly, allowed the assessee's contentions partly. Assessee is in appeal on the issue of excluding export proceeds not received within six months from the total turnover while Revenue is in appeal on the relief granted by the learned CIT(A) while excluding the communication and insurance charges from the total turnover. 4. At the outset, both the Counsels agreed that the issue of excluding com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 113 1114/Hyd/2006 dated 31st December, 2007 in earlier years which is as under : "5. We have considered rival submissions on either side and also perused the material available on record. The only objection of the assessee is that the components which were excluded from the export turnover for the purpose of deduction under sec. 10B shall also be excluded from the total turnover. The learned departmental representative also has no objection for exclusion from the total turnover in respect of the components which were excluded from the export turnover. We have also carefully gone through the provisions of sec. 10B. Sub-section (4) of sec.10B provides for computation of eligible profit for the purpose of deduction under sec.10B. As per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Respectfully following the principles laid down above, we are of the opinion that export proceeds not received within six months are also to be excluded from the total turnover on the same principle. This issue was analysed by the Hon'ble High Court of Bombay in the case of CIT vs. Gem Plus Jewellery India Ltd. 194 Taxman 192 as under : 4. Under sub-s. (1) of s. 10A a deduction is allowed from the total income of the assessee of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years commencing from the assessment year relevant to the previous year in which the undertaking begins manufacture or production. Sub-s. (4) of s. 10A p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the business carried on by the undertaking would consist of the turnover from export and the turnover from local sales. The export turnover constitutes the numerator in the formula prescribed by sub-s. (4). Export turnover also forms a constituent element of the denominator in as much as the export turnover is a part of the total turnover. 6. The export turnover, in the numerator must have the same meaning as the export turnover which is a constituent element of the total turnover in the denominator. The legislature has provided a definition of the expression "export turnover" in Expln. 2 to s. 10A by which the expression is defined to mean the consideration in respect of export by the undertaking of articles, things or computer softwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue were to be accepted, the same expression viz. 'export turnover' would have a different connotation in the application of the same formula. The submission of the Revenue would lead to a situation where freight and insurance, though it has been specifically excluded from "export turnover" for the purposes of the numerator would be brought in as part of the "export turnover" when it forms an element of the total turnover as a denominator in the formula. A construction of a statutory provision which would lead to an absurdity must be avoided". 8. Respectfully following the above, we are of the opinion that whatever is the amount arrived at as export turnover for numerator, the same should be included in the total turnover which is denomina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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