2010 (9) TMI 1102

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....leted u/s 143(3) of the Income-tax Act 1961. 2. The assessee is a company engaged in the business of manufacturing and exporting granite slabs and monuments. The assessee company had reported its sales under four categories. 1) Direct Exports 2) Exports through third party 3) Inter Unit Transfers 4) Domestic tariff area sales. 3. In respect of direct exports, third party exports and sales to other export units the assessee has claimed deduction under the provisions of sec. 10B of the Income-tax Act 1961. 4. The Assessing Officer straightaway allowed the deduction claimed by the assessee in respect of direct exports. In respect of remaining two, the third party exports and sales to other exports u....

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....deduction is made from the export turnover, the same should be deducted from the total turnover as well. This issue was considered by the ITAT - A Bench, in the case of TATA Elxsi Vs. ACIT, 115 TTJ 423. Relying on the judgment of the Hon'ble Bombay High Court in the case of CIT Vs. Sudharshan Chemicals Industries Ltd, the Tribunal held that these items are necessarily to be reduced from the export turnover but the Tribunal has accepted the alternate contention of the assessee. The Tribunal held that if such expenses are reduced from the export turnover, correspondingly, the same should be reduced from the total turnover as well. Following the above judgment of the Tribunal, we accept the alternate contention of the assessee and direct the A....

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.... is readily available in that judgment itself. By following the ratio of the above judgment, we come to the conclusion that the assessee cannot claim the deduction u/s 10B in respect of the so called exports made through third parties/export houses. 10. Without prejudice to the above legal conclusion, we also find that the assessee has not explained the factual background in a consistent manner, which would at least prompt the Assessing Officer to examine whether the assessee is entitled for such benefit at all. We have gone through the detailed assessment order passed in this case. The Assessing Officer has listed the names of 398 parties who are according to the assessee export houses and to whom the assessee had made sales for the pur....