2021 (6) TMI 1010

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....l. 2.1 The assessee is a resident company engaged in the business of export of software and IT enabled service. For the Assessment Year 2009-2010, the assessee claimed deduction under section 10B in his return of income for an amount of Rs. 12,55,03,000/-. During the assessment proceedings, the assessee has presented before the Assessing Officer that if at all the claim under section 10B is not allowed, the same may be considered under section 10A. The Assessing Officer completed the assessment under section 143(3) on 26.12.2011 and disallowed the claim of the assessee for deduction under section 10B for the amount of Rs. 12,55,03,000/- for want of rectification accorded by the Board of Approval appointed for this purpose by the Governme....

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....mitted that the the issue involved in the present appeals is covered by the decision of the Hon'ble Supreme Court of India reported in 2020 (113) taxmann.com 74 (SC) [Commissioner of Income-Tax III v. Mphasis Ltd.], wherein, the Hon'ble Supreme Court of India held as follows : "1.The instant petition is filed by the petitioner- Revenue assailing the judgment dated 01.08.2014 passed by the High Court of Karnataka at Bangalore in I.T.A. No. 1075 of 2008. 2. When the petition is taken up for consideration Mr. Vikramjit Banerjee, learned Additional Solicitor General appearing for the petitioner-Revenue and Mr. Parcy Pardiwala, learned senior counsel appearing for the respondent, are in agreement that SLP(C)No.2373/2015....

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.... 10A is a beneficial section. It is intended to provide incentives to promote exports. The incentive is to exempt profits relatable to exports. In the case of combined business of an assessee, having export business and domestic business, the legislature intended to have a formula to ascertain the profits from export business by apportioning the total profits of the business on the basis of turnovers Apportionment of profits on the basis of turnover was accepted as a method of arriving at export profits. In the case of section 80HHC, the export profit is to be derived from the total business income of the assessee, whereas in Section 10A, the export profit is to be derived from the total business of the undertaking. Even in the cas....

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....port turnover, the very same meaning given to the export turnover by the legislature is to be adopted while understanding the meaning of the total turnover, when the total turnover includes export turnover. If what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible. If that were the intention of the legislature, they would have expressly stated so. If they have not chosen to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the legislature to the export turnover is to be respecte....