The Tax Publishers2019 TaxPub(DT) 1998 (Karn-HC)

INCOME TAX ACT, 1961

Section 10A

Deducted expenditure from 'Export Turnover' is also required to be deducted from 'Total Turn Over' for the purpose of computing the deduction under section 10A.

Exemption under section 10A - Exclusion from export turnover vis-a-vis Total Turnover Computation of. - -

In the instant appeal revenue challenged the order of Tribunal directing AO to exclude expenses incurred in foreign currency and other expenses that were excluded from export turnover, from the total turnover also and accordingly recomputed the deduction under section 10A. Contention of revenue was that there is no provision in section 10A that such expenses should be reduced from the total turnover also as clause (iv) Explanation 2 to section 10A provides that such expenses are to be reduced only from the export turnover. Held: What is excluded from 'export turnover' must also be excluded from 'total turnover', since one of the components of 'total turnover' is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. If the deductions of expenses under section 10A 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 assessee which could have never been the intention of the legislature.

Followed:Tata Elxsi Ltd. v. Asstt. CIT [IT Appeal No. 411 of 2008, dt. 20-10-2014] : 2015 TaxPub(DT) 5191 (Karn-HC), CIT v. HCL Technologies Ltd. (2018) 404 ITR 719 (SC) : 2018 TaxPub(DT) 2138 (SC).

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



IN THE KARNATAKA HIGH COURT

VINEET KOTHARI & S. SUJATHA, JJ.

CIT v. Citrix R & D India (P.) Ltd.

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