Export turnover exclusion must also reduce total turnover for Section 10A and 10B deduction computation.

Expenses reduced from export turnover must also be excluded from total turnover when computing deduction under Section 10A and Section 10B of the Income-tax Act, 1961, because the Bombay High Court followed its earlier ruling in Commissioner of Income Tax v. Gem Plus Jewellery India Ltd. that the statutory computation requires parity between export turnover and total turnover. No reason was found to depart from that view, so the issue was decided in favour of the assessee and against the Revenue.

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

Analysis: The question stood covered by the earlier decision of the same Court in Commissioner of Income Tax v. Gem Plus Jewellery India Ltd., which had already held that the expenses excluded from export turnover must also be excluded from total turnover for the purpose of the statutory computation. The appeal did not disclose any reason to depart from that view.

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

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