Case Law Details
CIT Vs TNQ Books and Journals Private Limited (Madras High Court)
Conclusion: Assessee was entitled to alternative claim of exemption on export of software and IT enabled service under section 10A by following the decision in case of 2020 (113) taxmann.com 74 (SC) [Commissioner of Income-Tax III v. Mphasis Ltd.]
Held: Assessee was a resident company engaged in the business of export of software and IT enabled service. It claimed deduction under section 10B in his return of income. During the assessment proceedings, assessee had presented before AO that if at all the claim under section 10B was not allowed, the same might be considered under section 10A. AO completed the assessment under section 143(3) and disallowed the claim of assessee for deduction under section 10B for want of rectification accorded by the Board of Approval appointed for this purpose by the Government of India. AO rejected the alternative claim of assessee for deduction under section 10A. AO completed the assessment under section 143(3) and disallowed the claim of assessee for deduction under section 10B for want of rectification accorded by the Board of Approval appointed for this purpose by the Government of India. AO rejected the alternative claim of assessee for deduction under section 10A. Aggrieved over the order passed by AO, assessee preferred an appeal before CIT (A) and CIT(A) partly allowed the appeal. Tribunal allowed the appeal by directing AO to verify the condition as per section 10A and allowed the claim of assessee. On further appeal. It was held that following the decision in case of 2020 (113) taxmann.com 74 (SC) [Commissioner of Income-Tax III v. Mphasis Ltd.], wherein it was held that when the statute prescribes a formula and in the said formula, ‘export turnover’ is defined, and when the ‘total turnover’ includes export 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 respected and given effect to, while interpreting the total turnover which is inclusive of the export turnover. Following the same, assessee was entitled to alternative claim of exemption under section 10A.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Challenging the order passed in I.T.A.No.758/Mds/2014 in respect of the Assessment Year 2009-2010 on the file of the Income Tax Appellate Tribunal, Chennai, “C” Bench (for brevity, the Tribunal), the Revenue has filed the above appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
