AI Drafter 
TaxTMI 
TaxTMI 
2018 (6) TMI 1478
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....s in respect of the 'deemed export of goods' made by it during the period in question through a third party. 3. The Revenue has suggested the substantial questions of law in the Memorandum of Appeal filed by it. 4. At the outset, learned counsel for the Appellants-Revenue, Mr. K.V. Aravind fairly submitted that as far as Question No.2 regarding the expenses incurred by the assessee towards Freight and Insurance charges to be reduced from the 'Export Turnover' was concerned, the same was required to be reduced from the 'Total Turnover' also is the question no longer res integra and the said issue is covered against the Revenue by the judgment of the Hon'ble Supreme Court of India in the case of Commissioner of Income-tax, Central - III vs. HCL Technologies Ltd., [2018] 93 Taxmann.com 33(SC), in which the Hon'ble Supreme Court dealing with a case of similar nature u/s.80HHC and u/s.80HHE held that the object of formula in S.10A for computation of deduction is to arrive at profit from export business, therefore expenses excluded from 'Export Turnover' have to be excluded from 'Total Turnover' also and any other interpretation in this regard would make the formula as prescribed u....
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....m the aforesaid provisions, it is clear that if a assessee wants to claim the benefit of Section 10A, firstly he must export articles or things or computer software. Secondly, the said export may be done directly by him or through other exporter after fulfilling the conditions mentioned therein. Thirdly, such an export should yield foreign exchange which should be brought into the country. If all these three conditions are fulfilled, then the object of enacting Section 10A is fulfilled and the assessee would be entitled to the benefit of exemption from payment of Income Tax Act on the profits and gains derived by the Undertaking from the export. 21. Clause 6.11 of Exim Policy dealing with entitlement for supplies from the DTA states that supplies from the DTA to EOU/EHTP/STP/BTP units will be regarded as 'deemed export', besides being eligible for relevant entitlements under paragraph 6.12 of the Policy. They will also be eligible for the additional entitlements mentioned therein. What is of importance is when a supply is made from DTA to STP, it does not satisfy the requirements of export as defined under the Customs Act. However, for the purpose of Exim Policy, it ....
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....ndred per cent export oriented undertakings), S.10BA (Special provisions in respect of export of certain articles or things), S.10BB (Meaning of computer programmes in certain cases), S.10C (Special provision in respect of certain industrial undertakings in North-Eastern Region). 11. All these aforesaid provisions were intended to provide for incentive or benefit of exemption or deduction from the total income in respect of profit and gain earned by the Undertaking of the specified nature falling in the specified category as specified in these provisions. The substantive terms of these provisions are in pari materia defining the criteria for specification of the units or nature of assessee, who will be entitled to such deduction viz. SEZ, 100% EOU, North-East India Territory etc., subject to fulfillment of certain other conditions as well. 12. As far as Sections 10A and 10B are concerned, besides the nature of unit being different Free Trade Zone Unit (S.10A) and 100% EOU Unit (S.10B), the substance of these provisions is the same, the difference is only in the categories of assessee covered by these two sections separately. While S.10A covers newly established undertakings i....
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.... the main provision which grants the deduction in respect of profit and gains to the assessee-unit in question. It is true that the assessee- unit in question in order to be entitled to avail the benefit of S.10B of the Act has to be a manufacturing unit and it cannot be merely a trading house, but on a plain reading of sub-section (1) the deduction u/s.10B cannot be restricted to the goods manufactured or produced by the assessee-unit himself or itself. There is no restriction imposed in sub-section (2) of S.10B on the quantum of deduction eligible u/s.10B (1) of the Act with reference to export of goods manufactured by unit itself. The purpose of sub-section (2) is only to ensure that the conditions of unit not formed by splitting up of a new industrial unit and which is engaged in manufacturing of goods and articles is satisfied by the assessee in question. We do not see any restriction of export of goods purchased from the domestic units also by the assessee to be included for the purpose of deduction u/s.10B (1) of the Act. (ii) Secondly, the Division Bench of this Court in M/s.Tata Elxsi's case (supra) has already dealt with this aspect of the matter that even the de....