Section 10A deduction survives voluntary transfer pricing adjustment when the income is already returned and no revenue-determined ALP adjustment exists.

Section 10A deduction remains allowable where an assessee voluntarily makes a transfer pricing adjustment and includes the corresponding income in its return, because the proviso to section 92C(4) is not triggered absent a revenue-determined arm's length price adjustment under section 92CA(3). The Tribunal applied this principle and accepted that the adjustment, being part of the returned income, did not justify denial of export-linked relief.

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Issues: Whether deduction under section 10A of the Income-tax Act, 1961 is allowable in respect of a voluntary transfer pricing adjustment made by the assessee while computing income at arm's length price.

Analysis: The assessee had itself computed the transfer pricing adjustment and disclosed the corresponding income in the return, while excluding the amount from export turnover in the section 10A computation. No adjustment was made by the Transfer Pricing Officer under section 92CA(3), and the case did not involve an enhancement of income by determination of arm's length price by the revenue authorities. In these circumstances, the proviso to section 92C(4) was held not to apply. The Tribunal followed the view that section 10A relief cannot be denied where the assessee has voluntarily determined arm's length price and the adjustment forms part of the returned income.

Conclusion: Deduction under section 10A was held allowable on the voluntary transfer pricing adjustment, and the Revenue's challenge failed.

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