2010 (3) TMI 1106

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....r, has to be reduced from the total turnover also for the purpose of computing deduction u/s 10B 2. The CIT(A) ought to have appreciated that there is no provision in section 10B which requires the concerned expenses, which are required to be reduced from the export turnover as per clause(iii) of Explanation 2 to section 10B, to be reduced from the total turnover also. 3. The CIT(A) was not correct in holding that the export of the gods manufactured by the assessee company through third parties amounting to Rs. 13,05,22,177/- claimed as deemed export should not be excluded from the export turnover for the purpose of computing deduction allowance u/s 10B. 4. The CIT(A) failed to appreciate the facts and circumstanc....

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....tal turnover as well, by observing as under; "4.4 As regards the appellant's reliance on the decision of Hon'ble ITAT, Chennai Bench in the case of California Software Co. Ltd.,(2008) 119 TTJ 842, clause(iii) to Explanation 2 to Sec. 10B(8) defines the term 'Export Turnover' to mean consideration received in respect of export of articles or things or computer software but does not include "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". In this connection, the relevant extract of the decision of the Hon'ble ITAT, Chennai Bench with regard to d....

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....following the decisions of the jurisdictional Tribunal (supra) and the decision of the Special Bench(Supra), I accordingly, direct the AO to exclude the expenditure incurred on freight & insurance charges from the total turnover as well". Nothing contrary was brought to our knowledge on behalf of revenue. Under the facts and circumstances, we are not inclined to interfere with the finding of CIT(A), who has rightly held that the expenditure incurred on freight and insurance charges are to be reduced from export turnover as well for the purpose of computing deduction u/s 10B of the IT Act. 3. The next issue is with regards to exclusion of deemed exports amounting to Rs. 13,05,22,177/- for the purpose of calculating deduction u/s 10B. I....

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....though third party mainly M/s S.K.International and M/s ELE Stones (India) Ltd., On receipt of confirmed export orders from respective overseas customers for export cut and polished granite slabs, titles, slates etc. the above parties placed purchase orders on the assessee along with disclaimer certificates declaring that they will not be claiming export benefit on the third party export sales made by them thereby transferring the same to the manufacturers viz. the assessee and also simultaneously undertaking to indicate the assessee as the 100% EOU manufacturer of the materials being exported in the shipping bills filed with the customs authorities. Copies of purchase orders, invoices, disclaimer certificates, application made for removal ....