TaxTMI 
TaxTMI 
2021 (4) TMI 1134
X X X X Extracts X X X X
X X X X Extracts X X X X
....peal was admitted on the following substantial questions of law: " Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the travelling expenditure incurred in foreign currency is to be reduced from the total turnover also for the purpose of computation of deduction under section 10A of the Act?" 3. When the appeal is taken up for hearing, Mr.Karthik Ranganathan, learned Senior Standing Counsel appearing for the appellant fairly submitted that the above question of law is covered by the decision of this Court dated 02.03.2021 made in T.C.A. No.975 of 2010 [The Commissioner of Income Tax - III v. M/s. SRA Systems Ltd., Chennai], wherein this Court held as follows: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. 20.Even in the common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sequently, the Assessing Officer had reason to believe that income chargeable to tax had escaped assessment on account of the assessee Company being ineligible for deduction under Section 10A. Subsequently, a notice dated 22.03.2007 was issued under Section 148 and after giving an opportunity of hearing, the scrutiny assessment order was passed on 17.12.2007, disallowing the entire claim of deduction under Section 10B. Further, the expenditure incurred for the renovation and repairs of the rented premises of the assessee Company was disallowed by the Assessing Officer on the ground that such expenses were in the nature of capital expenditure. The Assessing Officer in his re-assessment order noted that in terms of Section 10B(ii) an undertak....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (ii) and (iii) of Sub Clause (2) to Section 10A of the Income Tax Act." 7.The order passed by the Income Tax Appellate Tribunal was challenged by the Department in T.C.A.No.1916 of 2008 and the Hon'ble Division Bench of this Court by its judgment dated 26.10.2018 confirmed the order of the Income Tax Appellate Tribunal dated 16.05.2008 made in I.T.A.No.2255/Mds/06 for the Assessment Year 2002-03 and dismissed the appeal. In view of the judgment of the Hon'ble Division Bench of this Court, it is clear that the applicability of Clauses (ii) and (iii) of Sub Clause (2) to Section 10B of the Act, the impugned order passed by the Income Tax Appellate Tribunal is proper. In view of the order passed by the Income Tax Appellate Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....income by way of brought forward or carry forward the depreciation allowance of the earlier Assessment years and set off the unabsorbed depreciation first and making the return Nil, thereby leaving the Assessee in a position where it could not claim an deduction under Section 10B as there was no income after set off of carry forward depreciation and unabsorbed depreciation from earlier years. 29.This method of computing the income in the present case made by the Revenue is totally against the said law as has been declared by te Hon'ble Apex Court in the aforesaid decision in Commissioner of Income-tax v. Yokogawa India Ltd., (cited supra). 30.Therefore we have no hesitation to hold that, the decision of the ITAT, which....