Export turnover adjustment for section 10A and 10B deductions must also be made to total turnover, favouring the assessee.

For deduction under section 10A and section 10B of the Income-tax Act, 1961, expenses excluded from export turnover must also be excluded from total turnover when computing the deduction. The Bombay High Court applied its binding earlier decision and saw no reason to depart from that view. The question of law was therefore answered in favour of the assessee and against the Revenue.

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Issues: Whether, while computing deduction under section 10A and section 10B of the Income-tax Act, 1961, expenses reduced from export turnover are also required to be excluded from total turnover.

Analysis: The issue was covered by the binding decision of the Court in favour of the assessee. The Court found no reason to take a different view on the treatment of such expenses in the computation of deduction.

Conclusion: The question of law was answered against the Revenue and in favour of the assessee.

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