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of <h1>Appeal partially allowed: Foreign exchange expenditure deductible under section 10A; not under section 80HHE.</h1> <h3>DCIT Versus Daimler Chrysler Research and Technology India (P) Ltd.</h3> DCIT Versus Daimler Chrysler Research and Technology India (P) Ltd. - TMI Issues involved: Appeal related to assessment year 2003-04, involving deduction u/s.10A and u/s.80HHE.Deduction u/s.10A: The controversy was whether foreign exchange expenditure should be deducted from both export turnover and total turnover while computing the deduction u/s.10A. The department argued against deducting it from total turnover, citing lack of definition. Referring to a similar case u/s.10B, the Tribunal upheld that foreign currency expenditure should be deducted from total turnover to maintain parity with export turnover. Relying on this, the decision of the Commissioner of Income-tax (Appeals) was upheld, and the grounds were dismissed.Deduction u/s.80HHE: The issue was whether income not exempt under u/s.10A could be claimed as a deduction u/s.80HHE. The department held that once u/s.10A claim is exhausted, no further deduction u/s.80HHE can be claimed. Citing a previous Tribunal order, it was held that u/s.10A and u/s.80HHE computations are independent, and once u/s.10A deduction is computed, it would prevent other deductions like u/s.80HHE. Following this precedent, the decision of the Commissioner of Income-tax (Appeals) was reversed, and the department's grounds were allowed.Conclusion: The appeal was partly allowed based on the decisions regarding deductions u/s.10A and u/s.80HHE.
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