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TMI Blog2018 (6) TMI 1478X X X X Extracts X X X X X X X X Extracts X X X X ..... within the ambit and scope of the ‘Export Turnover’ as explained in Explanation-2 of sub- section (9A) of the said S.10B of the Act. Restrict the deduction in the hands of the respondent-assessee by excluding the ‘Deemed Exports’, does not have any merit and the said contention deserves to be rejected and the same is accordingly rejected. Establish that both the Respondents-assessees before us and the entity through whom such export was made by the assessee for the period in question, have claimed any double or repetitive benefit u/s.10B of the Act for the same transaction of export. The issue raised in the present case by the Revenue is squarely covered by the decision of the Division Bench of this Court in M/s. Tata Elxsi’s case [2015 (10) TMI 634 - KARNATAKA HIGH COURT] - substantial question of law decided in favour of the assessee. - I.T.A.No.564/2016 C/W, I.T.A.No.561/2016, I.T.A.No.562/2016, I.T.A.No.563/2016, I.T.A.No.258/2010 - - - Dated:- 12-6-2018 - Dr. Vineet Kothari And Mrs. S. Sujatha, J.J. Mr. Aravind K.V. ADV.- For the Appellant Mr. S. Parthasarathi, ADV.- For the Respondent JUDGMENT 1. These appeals have been filed by the Revenue Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l deserves to be reframed in the following manner:- Whether in the facts and circumstances of the case, the Respondent-assessee is entitled to deduction u/S.10B of the Act in respect of the Deemed Export of goods made by it during the period in question through a third party or not? . 7. At the outset, we may note that a similar controversy came to be decided by the co-ordinate Bench of this Court in the case of M/s. Tata Elxsi Ltd., vs. Asst. Commissioner of Income Tax, decided on 20.10.2015 since reported in (2015) 127 DTR 0327 (Kar), the Division Bench of this Court for the purpose of S.10A of the Act held the assessee entitled to the benefit of such deduction in respect of Deemed Exports made by it, while the goods in question were sold by the assessee M/s. Tata Elxsi Ltd., to another STP unit within India M/s. Texas Instruments India Pvt. Ltd., (TIIPL) for the purpose of export outside India. 8. The Division Bench of this Court discussed in detail the definition of Export Turnover , the Exim Policy and held that the purpose of giving the deduction to the assessee u/s.10A of the Act in respect of the export of goods made by it in terms of Exim Policy was to fet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should personally export goods manufactured /software developed by it outside the country. It may export out of India by itself or export out of India through any other STP Unit. Once the goods manufactured by the assessee is shown to have been exported out of India either by the assessee or by another STP Unit and foreign exchange is directly attributable to such export, then Section 10A of the Act is attracted and such exporter is entitled to benefit of deduction of such profits and gains derived from such export from payment of income tax. Therefore, the finding of the authorities that the assessee has not directly exported the computer software outside country and because it supplied the software to another STP unit, which though exported and foreign exchange received was not treated as an export and was held to be not entitled to the benefit is unsustainable in law. The substantial question of law is answered in favour of the assessee and against the revenue. The appeal is allowed. The impugned orders are set aside. The assessee is held to be entitled to deduction of such profits and gains derived from the export of the computer software. No costs . 10. Before dealing wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Therefore, prima-facie, we felt that the controversy involved in the present appeals for S.10B benefit filed by the Revenue is also covered by the decision of the co-ordinate Bench of this Court in the case of M/s. Tata Elxsi Ltd., (supra) u/S.10A of the Act, but, since the learned counsel for the Revenue has raised certain arguments for our consideration, we considered it appropriate to deal with his arguments before answering the substantial question of law framed by us as given above. 15. The first argument raised by the learned counsel for the appellants-Revenue Mr. K.V. Aravind is that S.10B applies only if an Undertaking satisfies the condition as prescribed in sub-section(2) thereof, vide clause(1) of sub-section(2) requires the assessee to manufacture or produce any articles or things or computer software and clause(2) requires that such assessee unit is not formed by the splitting up or the reconstruction of a business already in existence or it is not formed by transfer of plant and machineries previously used, to the assessee-unit in question. 16. The learned counsel for the Revenue urged that since the assessee-unit has to manufacture the articles or things ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of S.10B of the Act also. 18. For both these reasons, we cannot accept the aforesaid submissions of the learned counsel for the Revenue and the contention therefore is liable to be rejected and the same is accordingly rejected. 19. Another contention which was raised by the learned counsel for the Revenue before us is that in sub-section (1) of S.10B, the words used profit and gains as are derived by a 100% Export Oriented Unit Undertaking , he emphasized the words by the Undertaking and therefore, submitted that for this reason, the export in question should take place directly from the hands of Undertaking in question itself and not through a third party. He also submitted that like in the case of M/s.Tata Elxsi (supra), both the units were located in the same STP area. In the present case, the entity through whom the export has been made by the assessee is not 100% Export Oriented Unit and therefore, the benefit of S.10B should be denied to the Respondent-assessee before this Court. 20. We are unable to accept even this submission of learned counsel for the appellant-Revenue. We do not find any good reason to take a narrow and pedantic approach in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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