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TMI Blog2017 (2) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... e of parity if export freight excluded from export turn-over and the same also ought to be excluded from total turnover while computing exempted profit u/s. 10B of the act therefore, we allow the appeal of the assessee. - ITA No. 2720/Ahd/2013 - - - Dated:- 20-2-2017 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member For The Revenue : Shri Sitaram Meena, Sr. D.R. For The Assessee : Ms. Urvashi Shodhan, A.R. ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- This assessee s appeal for A.Y. 2009-10, arises from order of the CIT(A)-I, Ahmedabad dated 30-09-2013 in appeal no. CABI/ 69/12-13, in proceedings under section 154 r.w.s. 292-B of the Income Tax Act, 1961; in short the Act . ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the business of manufacturing of Cassia Gum Powder and Guar Gum Powder. The assessee company has claimed deduction u/s. 10B of the act. The assessing officer completed the assessment u/s. 143(3) on 26th December, 2008 by allowing the claim u/s. 10B(4) of the act to the amount of ₹ 7,64,98,712/-. Subsequently, assessing officer has initiated proceedings u/s. 154 of the act stating that it was noticed that in the claim u/s. 10B, the assessee company has not deducted an amount of ₹ 1,29,44,675/- from export turn-over being export freight. Thereafter, the assessing officer has passed order u/s. 154 of the act on 25th April, 2012 and reworked the deduction u/s. 10B of the act and restricted it to the extent of ₹ 7,21,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per explanation 2(iii) below section 10B, freight and insurance charges etc. attributable to the delivery of the articles or things or computer software outside India are required to be excluded from the export turnover. Considering all these facts, it is held that the AO has correctly recomputed the exempted profit u/s 10B(4) in the case of appellant by excluding export freight charges of ₹ 1,29,44,675/- from export turnover and therefore the action of the AO in this regard is confirmed. Thus, the ground of appeal no.2 as well as additional ground of appeal of the appellant is dismissed. 4. During the course of appellate proceedings before us, learned counsel contended that on principle of parity if export freight excluded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness, the legislature intended to have a formula to ascertain the profits from export business by apportioning the total profits of the business on the basis of turnovers. Apportionment of profits on the basis of turnover was accepted as a method of arriving at export profits. In the ease of Section 80HHC, the export profit is to be derived from the total business income of the assessee, whereas in Section 10-A, the export profit is to be derived from the total business of the undertaking. Even in the case of business of an undertaking, it may include export business and domestic business, in other words, export turnover and domestic turnover. The export turnover would be a component or part of a denominator, the other component being the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. If that were the intention of the legislature, they would have expressly stated so. If they have not chosen to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the legislature to the export turnover is to be respected and given effect to, while interpreting the total turnover which is inclusive of the export turnover. Therefore, the formula for computation of the deduction under Section 10-A, would be as under: Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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