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TMI Blog2019 (12) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Deduction u/s 10AA - excluding IUT sales - HELD THAT:- AO has observed that after excluding IUT sales, deduction under section 10AA has been shown at ₹ 5,74,56,852 and including IUT sales deduction under section 10AA of the Act has been computed at ₹ 5,98,75,170, however, in the statement of facts attached to the memorandum of appeal in form no.36, the assessee has produced both the working in Para 4. As per the said working, deduction u/s 10AA excluding IUT sales has been shown at ₹ 5,98,75,170, whereas, by including IUT sales deduction u/s 10AA has been shown at ₹ 5,74,56,852. This anomaly between the figures mentioned in the assessment order and in the statement of facts requires reconciliation. No circumstances, the assessee can be allowed deduction under section 10AA in respect of sales made to other SEZ units (IUT sales). In view, the AO is directed to verify the actual figure of exports made by the assessee directly and allow deduction under section 10AA. This ground is allowed for statistical purpose. Excluding the interest received on fixed deposit from the export turnover for computing deduction u/s 10AA - HELD THAT:- It is noticed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and adding back the very same amount to the income of the assessee. However, in the computation of income, the Assessing Officer allowed deduction under section 10AA of the Act at ₹ 1,75,90,920, as certified by the Auditor in Form no.56F. Against the assessment order so passed, the assessee preferred appeal before the first appellate authority. 4. In the course of appeal proceedings, it was submitted by the assessee that income received from other SEZ units should also be treated as export and would qualify for deduction under section 10AA of the Act. After considering the submissions of the assessee, learned Commissioner (Appeals) found that the Assessing Officer has computed deduction under section 10AA of the Act on the basis of audit report filed by the assessee in Form no.56F, except a minor adjustment of ₹ 2 lakh out of the indirect expenses. Further, with regard to assessee s contention that the Assessing Officer has not considered the alternative computation furnished by the assessee in Form no.54F, learned Commissioner (Appeals) observed, the issue raised by the assessee does not emanate from the assessment order. Further, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has worked out deduction under section 10AA of the Act only on direct export sales made by it. Whereas, in para (b) containing the without prejudice working of 10AA deduction, the assessee has computed the deduction by including the sales made to other SEZ units. In other words, even sales which were not in the course of direct export by the assessee were included in the export turnover, thereby, enhancing the claim of deduction under section 10AA of the Act to ₹ 2,23,99,783. Assessee s contention is, the computation of 10AA deduction including the sales to other SEZ units has not been considered by the Revenue authorities. We are unable to accept the aforesaid contention of the assessee. Admittedly, the sales made to other SEZ units are not export sales of the assessee. As per the definition of export turnover under Explanation 1 to section 10AA of the Act would mean the consideration in respect of export made by the undertaking. Thus, to come within the ambit of export under section 10AA of the Act, the assessee must directly export the goods out of India. Whereas, in the facts of the present case, the IUT sales are not directly exported by the assessee out of India, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals). However, learned Commissioner (Appeals) upheld the decision of the Assessing Officer. 13. The submissions of the learned Authorised Representative on the issue are identical to the submissions made by him on similar issue in the appeal for the assessment year 2008 09. 14. The learned Departmental Representative relied upon the observations of the learned Commissioner (Appeals) as well as the argument on similar issue made earlier. 15. We have considered rival submissions and perused the material on record. Facts qua the claim of deduction under section 10AA of the Act in the impugned assessment year are identical to the assessment year 2008 09. In the impugned assessment year also, the assessee furnished two workings of the deduction under section 10AA of the Act, one including the IUT sales and another excluding IUT sales. The Assessing Officer while rejecting the working including IUT sales has accepted the working excluding IUT sales. However, there is some confusion with regard to final figure of deduction claimed under section 10AA of the Act under both the working. Though, in the assessment order, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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