Section 10A turnover computation requires uniform exclusion of expenses from both export turnover and total turnover.

For Section 10A computation, telecommunication expenses and foreign travel expenditure excluded from export turnover must also be excluded from total turnover to maintain parity in the statutory formula. The underlying principle is that the components of export turnover and total turnover should be treated uniformly, because the same expression cannot bear different meanings within the same provision. This consistent construction avoids an anomalous result and aligns the deduction mechanism with the incentive-oriented object of Section 10A. On that basis, the excluded expenses are reduced from both the numerator and the denominator in computing the deduction.

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Issues: Whether telecommunication expenses and foreign travel expenditure excluded from export turnover for deduction under Section 10A of the Income-tax Act, 1961 were also required to be excluded from total turnover while computing the deduction.

Analysis: The binding jurisdictional and persuasive High Court precedents held that for Section 10A, the components of export turnover in the numerator and total turnover in the denominator must remain uniform. Where specified expenses are excluded from export turnover, the same exclusion must apply to total turnover to preserve parity and avoid an anomalous result. The provision being incentive-oriented, the computation formula has to be construed consistently with the legislative intent.

Conclusion: The excluded expenses were required to be reduced from both export turnover and total turnover while computing deduction under Section 10A, in favour of the assessee.

Ratio Decidendi: For Section 10A computation, any amount excluded from export turnover must also be excluded from total turnover because the same expression cannot bear different meanings within the same statutory formula.

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