ITAT rules in favor of appellant, excludes revenue items from export turnover

The ITAT partially allowed the appellant's appeal, directing the Assessing Officer to exclude revenue items from export turnover as per the CIT Vs. HCL Technologies Ltd. decision and CBDT circular. The appellant's challenge against the CIT(A)'s order for AY 2009-10 under section 143(3) of the Income Tax Act, 1961, specifically regarding the disallowance of export turnover amount, was successful. The ITAT's judgment on 25th October 2021 provided a detailed analysis of the arguments presented and legal principles applied, resulting in a favorable outcome for the appellant on the specified issue.

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Issues:
1. Appeal against CIT(A)'s order for AY 2009-10 under section 143(3) of the Income Tax Act, 1961.
2. Disallowance of export turnover amounting to Rs. 42,86,17,492 under section 10A of the Act.

Analysis:
1. The appellant challenged the CIT(A)'s order on various grounds, including the computation of deduction under section 10A of the Act. The appellant argued that the CIT(A) erred in adopting only Rs. 6,50,60,398 as "export turnover" and in rejecting additional grounds related to on-site development proceeds of the US Branch. The appellant contended that the on-site development proceeds were credited to a separate bank account outside India with RBI approval, as per Explanation-2 under section 10A(3) of the Act. The appellant also cited RBI circulars and previous DRP orders to support their position.

2. The ITAT, after hearing both parties, considered the appellant's argument that any revenue item excluded from export turnover should also be excluded from the total turnover. The ITAT noted the landmark decision of the apex court in CIT Vs. HCL Technologies Ltd. and a CBDT circular supporting this position. Consequently, the ITAT partially accepted the appellant's plea and directed the Assessing Officer to make the necessary computation in accordance with the law. No other grounds were pursued during the hearing.

3. The ITAT concluded by partly allowing the appellant's appeal for statistical purposes, specifically regarding the disallowance of the export turnover amount. The order was pronounced in open court on 25th October 2021. The judgment provides a detailed analysis of the appellant's contentions, legal precedents, and the ITAT's decision, ensuring a comprehensive review of the issues raised in the appeal.

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