TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 178
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....come of Rs.14,86,91,468/-. The return was processed under section 143(1) of the Income Tax Act, 1961 ('the Act' in short) and the case was subsequently taken up for scrutiny. After examination, the assessment was completed by an order under section 143(3) of the Act dated 30/12/2011 in which the income of the assessee was determined at Rs.14,97,71,478/-. This was due to the Assessing Officer's re-computation of the eligible deduction under section 10A of the Act at Rs.2,43,73,672/-, by excluding travel expenditure of Rs.18,19,524/- incurred in foreign currency from export turnover. 2.2 Aggrieved by the order of assessment for assessment year 2008-09 dated 20/12/2011, the assessee preferred an appeal before the CIT(A)-III, Bangalore. The le....
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....export turnover and total turnover as well, has not reached finality in view of the pending department's SLP before the Hon'ble Supreme Court. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 5. The appellant craves leave to add, alter, amend and/or delete any of the grounds mentioned above. 4. The grounds raised at sl. No.1, 4 and 5 are general in nature and therefore, no adjudication is called for thereon. 5.1 In the grounds raised at S.Nos.2 and 3, revenue contends that the learned CIT(Appeals) erred in directing the Assessing Officer to recompute the allowab....
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....inator. The relevant finding of the Hon'ble jurisdictional High Court reads as follows:- "...........Section 10A is enacted as an incentive to exporters to enable their products to be competitive in the global market and consequently earn precious foreign exchange for the country. This aspect has to be borne in mind. While computing the consideration received from such export turnover, the expenses incurred towards freight, telecommunication charges, or insurance attributable to the delivery of the articles or things or computer software outside India, or expenses if any incurred in foreign exchange, in providing the technical services outside India should not be included. However, the word total turnover is not defined for the purpose of ....
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....would be a commonality between the numerator and the denominator of the formula. If the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denominator cannot be different. Therefore, though there is no definition of the term 'total turnover' in section 10A, there is nothing in the said section to mandate that, what is excluded from the numerator that is export turnover would nevertheless form part of the denominator. When the statute prescribed a formula and in the ....
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....ent element of the denominator in as much as the export turnover is a part of the total turnover. The export turnover, in the numerator must have the same meaning as the export turnover which is constituent element of the total turnover in the denominator. The legislature has provided a definition of the expression "export turnover" in Expln.2 to s.10A which the expression is defined to mean the consideration in respect of export by the undertaking of articles, things or computer software received in or brought into India by the assessee in convertible foreign exchange but so as not to include inter alia freight, telecommunication charges or insurance attributable to the delivery of the articles, things or software outside India. Therefore ....
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....ught in as part of the 'export turnover' when it forms an element of the total turnover as a denominator in the formula. A construction of a statutory provision which would lead to an absurdity must be avoided. Moreover, a receipt such as freight and insurance which does not have any element of profit cannot be included in the total turnover. Freight and insurance charges do not have any element of turnover. For this reason in addition, these two items would have to be excluded from the total turnover particularly in the absence of a legislative prescription to the contrary - CIT v Sudarshan Chemicals Industries Ltd. (2000) 163 CTR (Bom) 596: (2000) 245 ITR 769 (Bom) applied; CIT v Lakshmi Machine Works (2007) 210 CTR (SC) 1: (2007) 290 ITR....