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TMI Blog2009 (9) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... essor in Interest to Software Silicon Systems India Private Limited . Since identical issues are raised in these appeals, they are heard together and disposed of by this common order for the sake of convenience and brevity. 3. The grounds raised in these appeals are identical except in variance in figures and hence, grounds in ITA No.427/09 is reproduced below:- 1) That the order passed by the Commissioner of Income Tax, Large Tax Payers Unit, Bangalore (hereinafter referred to as 'the CIT) u/s 263 of the Income-tax Act, 1961 ('the Act') is contrary to the provisions of law and liable to be quashed. 2.1) That on the facts and in the circumstances of the case, the learned CIT erred in invoking the provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on 28th December, 2006, determining the taxable income at ₹ 17,28,72,010/- and ₹ 8,92,77,120/- respectively. The CIT was of the view that assessments completed u/s 143(3) were erroneous and prejudicial to the interest of revenue, since expenditure incurred in foreign currency, on account of professional and consultancy charges and traveling and conveyance expenses, were not reduced from the export turnover while calculating the deduction u/s 10A of the Act. 5. The reasoning of the CIT was, as per the provisions of section 10A, read with Explanation 2(iv), to arrive at the export turnover, any expenditure incurred in foreign currency in providing technical services outside India has to be reduced from the consideration rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on the facts of the case as also various decisions of the court as applicable in the case of the assessee, I have to conclude that the said assessment order of AY 2004- 05 is erroneous and prejudicial to the interest of revenue in so far as not reducing expenditure in Foreign Exchange in respect of professional and consultancy charges and traveling and conveyance while computing correct 10A deduction in accordance with law. Therefore, the Assessing Officer is directed to re-compute 10A deductions in accordance with law in view of the above discussions . 8. The assessee, being aggrieved by the CIT's revisionary order u/s 263 of the Act, is in appeal before us. The learned authorized representative reiterated the submissions made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange in providing the technical services outside India are to be excluded both from the export turnover and from the total turnover, which are the numerator and the denominator respectively in the formula. The appeals filed by the department are thus dismissed . Even though the order of Special Bench is in the context of section 10B of the Act, the ratio laid down in the above decision applies to section 10A of the Act as well as the provisions of section 10A and 10B are identical on all material aspects. More particularly, both the sections define only Export Turnover but not Total Turnover and sub-section (4) of both the sections prescribe an identical formula for computing the export profits. 9.1. Further, in the case of Tata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Turnover as well, for uniformity between the two components while computing the deduction u/s 10A of the Act. 9.4. The view that exclusions should be made from both Export Turnover as well as Total Turnover has also been upheld by the Hon'ble Supreme Court in the case of CIT v Lakshmi Machine Works (290 ITR 667). The same principle has also been upheld in the following judicial pronouncements: CIT v Chloride India Ltd. (2002) (256 ITR 625) (Cal.) CIT v Sudarshan Chemicals Industries Ltd. (2000) (245 ITR 769) (Bom.) CIT v Kantilal Chhotalal (2000) (246 ITR 439) (Bom.) CIT v H M Exports Limited (276 ITR 299) (Cal.) Although the above decision of Hon'ble High Court's has been rendered with relation to section 80HH ..... X X X X Extracts X X X X X X X X Extracts X X X X
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