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The Tribunal accordingly directed that the deduction under Section 10A should be computed after excluding freight and insurance from the total turnover. It is this finding of the Tribunal which is questioned by the Revenue in appeal.

4. Under sub section (1) of Section 10A a deduction is allowed from the total income of the assessee of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years commencing from the assessment year relevant to the previous year in which the undertaking begins manufacture or production. Sub section (4) of Section 10A provides the manner in which the profits derived from the export of articles or things or computer software shall be computed. Sub section (4) provides as follows :

"For the purposes of sub sections (1) and (1A), the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking."

5. Under sub section (4) the proportion between the export turnover in respect of the articles or things, or as the case may be, computer software exported, to the total turnover of the business carried over by the undertaking is applied to the profits of the business of the undertaking in computing the profits derived from export. In other words, the profits of the business of the undertaking are multiplied by the export turnover in respect of the articles, things or, as the case may be, computer software and divided by the total turnover of the business carried on by the undertaking. The formula which is prescribed by sub section (4) of Section 10A is as follows :

Profits derived from export of articles or things or computer software = Profits of the business export turnover in respect of the undertaking X of the articles or things or computer software ____________________________________________________ divided by total turnover of the business carried on by the undertaking.