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In respect of claim of exemption u/s 10A, 10AA & 10B, still there is lot of confusion is there between taxpayer and the tax officer. Given below chart based on the latest judicial pronouncement will help to reduce such confusion. 



Included in Turnover

Excluded in Turnover


Foreign currency transactions

CIT v. Tata Elxsi Ltd.

382 ITR 654


Income from sale of scrap, export incentives, interest income and gains on exchange rate fluctuation

Wipro Ltd. v. Deputy CIT

382 ITR 179

Watson Pharma P. Ltd. v. Deputy CIT

VOL 37 PG 97

GE BE P. Ltd. v. Asst. CIT

371 ITR 32


Only freight, telecommunication charges or insurance attributable to delivery of computer software outside India or expenses incurred in foreign exchange in providing technical services outside India to be excluded from total turnover. Also Travelling expenses.

CIT v. Hewlett Packard Global Soft Ltd 381 ITR 99

Aptean Software India P. Ltd. v . ITO VOL 41 PG 246

Cypress Semiconductor Technology India P. Ltd. v. Deputy CIT VOL 39 PG 468

Tektronix Engineering Devt. India P. Ltd. v. Deputy CIT VOL 39 PG 212

ACIT v.Think Soft Global Services (P.) Ltd 34 ITR 633


Lease line charges excluded from export turnover--To be excluded from total turnover

Sun Life India Service Centre P. Ltd. v. Deputy CIT-VOL 43 PG 511


Travelling expenses incurred in foreign currency to be reduced both from export turnover and total turnover

iNautix Technologies India P. Ltd. v. Asst. CIT

VOL 42 PG 324

McAfee Software (India) P. Ltd. v. Dy. CIT

VOL 40 PG 574


Expenses excluded from export turnover to be excluded from total turnover

Deputy CIT v . WS Atkins India P. Ltd.

VOL 41 PG 397

Dy. CIT v . Timken India Manufacturing P. Ltd.

VOL 41 PG 208

e4e Business Solutions India P. Ltd. v . Dy. CIT

VOL 41 PG 90

Torry Harris Business Solutions P. Ltd

VOL 40 PG 256


Profits arising out of fluctuation of rates of foreign exchange--Form part of export turnover-

Universal Precision Screws v. Asst. CIT

VOL 38 PG 233


Sale of scrap--Proceeds not includible in turnover

Universal Precision Screws v. Asst. CIT

VOL 38 PG 233

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Published by

Manish Kumar Agarwal
(GM - TAX)
Category Income Tax   Report

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