Export turnover and total turnover must be computed consistently, while section 10B relief depends on clear competent-board approval.

For export-related deductions, expenses excluded from export turnover must also be excluded from total turnover so the computation formula remains consistent, and the turnover adjustment was sustained. Deduction under section 10B required clear approval by the competent Board under the industrial law framework; because that approval was not clearly established, the matter was remanded for fresh verification. The alternative claim under section 10A was also left open for examination if section 10B relief was unavailable. The overall result was that the Revenue's turnover-based challenge failed, while the deduction issue required further assessment.

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Issues: (i) Whether expenses excluded from export turnover were also required to be excluded from total turnover; (ii) whether the assessee was entitled to deduction under section 10B, and in the alternative section 10A, in the absence of clear proof of approval by the competent Board; and (iii) whether exclusion of foreign travel expenses, communication expenses, freight outward and commission expenses from export turnover, and consequently from total turnover, was sustainable.

Issue (i): Whether expenses excluded from export turnover were also required to be excluded from total turnover.

Analysis: The same component cannot be taken into account differently for export turnover and total turnover. If an item is excluded from export turnover, consistency requires its exclusion from total turnover as well, so that the formula is applied on a like basis.

Conclusion: The exclusion from total turnover was and was upheld in favour of the Revenue on this issue.

Issue (ii): Whether the assessee was entitled to deduction under section 10B, and in the alternative section 10A, in the absence of clear proof of approval by the competent Board.

Analysis: Deduction under section 10B depended on approval by the Board appointed by the Government of India under section 14 of the Industries (Development and Regulation) Act, 1951. The material did not clearly establish that the ratification relied upon was by that competent Board. Since the alternative claim under section 10A also required examination on facts and law, the matter required fresh verification by the Assessing Officer.

Conclusion: The issue was remanded for fresh consideration, including examination of the claim under section 10A if section 10B relief was not available.

Issue (iii): Whether exclusion of foreign travel expenses, communication expenses, freight outward and commission expenses from export turnover, and consequently from total turnover, was sustainable.

Analysis: The same reasoning applicable to the first issue governed this claim as well. Once these items were excluded from export turnover, they were also to be excluded from total turnover, and no infirmity was found in the lower authority's approach on this aspect.

Conclusion: The exclusion was sustained.

Final Conclusion: The Revenue's challenge failed, while the assessee obtained only a limited remand on the deduction issue; the composite result left the matter partly open for fresh assessment and otherwise confirmed the turnover-related adjustments.

Ratio Decidendi: For computing export-related deductions, any amount excluded from export turnover must also be excluded from total turnover, and deduction under section 10B requires approval by the competent Board under the governing industrial law.

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