2015 (10) TMI 951

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.... 100 per cent export oriented unit. It filed a return of income for AY 2009- 10 on 23rd September, 2009 declaring a total income of Rs. 1,71,91,590/-. Thereafter, it filed a revised return revising its total income to Rs. 1,59,35,040/-. The Assessee claimed deduction under Section 10B (1) of the Act. 3. In the assessment order dated 19th December, 2011, the AO noted that the Assessee had included as part of its income scrap sales of Rs. 31,84,869/-, exchange rate difference amounting to Rs. 32,35,700/- and interest received on Fixed Deposit Receipts (FDRs) amounting to Rs. 1,60,11,996/-. The AO was of the view that only those profits and gains would be exempted under Section 10B which had direct and proximate relationship with activities....

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....ted period forms part of the sale proceeds and is directly related to the export activates. It was, accordingly, held that this should be treated as income derived from export activities. The above decision of the Bombay High Court was in the context of Section 10A of the Act. The learned counsel for the Assessee has also referred to the decision of the Madras High Court in CIT v. M/s Pentasoft Technologies Ltd. (2012) 342 ITR 578 (Mad.) where again that High Court has answered the question likewise and in favour of the Assessee. Since the provisions of Section 10A and 10B are more or less similar, the ITAT rightly held that for the purposes of Section 10B, the foreign exchange fluctuation has to be considered as part of the export turnover....