ITO WD 2(1)(4), MUMBAI V. GREYTRIX (INDIA) P.LTD, MUMBAI

ITA 5787/MUM/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7296 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 26-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Keywords: Business income
• Section: 80HHC; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI R.V. EASWAR, PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 5787/MUM./2009 (ASSESSMENT YEAR : 2006-07 ) INCOME TAX OFFICER WARD-2(1)(4), R.NO.553 AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 .. APPELLANT V/S M/S. GREYTRIX (INDIA) PVT. LTD. 402, MAHINDRA CHAMBERS OPP. DUKES FACTORY W.T. PATIL MARG CHEMBUR, MUMBAI 400 071 .... RESPONDENT REVENUE BY : MR. JITENDRA YADAV ASSESSEE BY : MR. NITESH JOSHI DATE OF HEARING 26.09.2011 DATE OF ORDER 07.10.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE REVENUE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 27 TH AUGUST 2009, PASSED BY THE COMMISSIONER (APPEALS)-XI, MUMBAI, FOR ASSESSMENT YEAR 2006-07. BRIEF FACTS OF THE CASE:- 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS IN THE BUSINESS OF EXPORT OF COMPUTER SOFTWARE. IT IS LOCATED IN A SOF TWARE TECHNOLOGY PARK M/S. GREYTRIX (I) PVT. LTD. ITA NO. 5787/MUM./2009 2 APPROVED BY GOVERNMENT OF INDIA AND HENCE IT WAS EL IGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). THE ISSUE THAT ARISES BEFORE US IS THE QUANTIFICATION O F RELIEF UNDER SECTION 10A ON INTEREST INCOME EARNED BY THE ASSESSEE WITH RESPECT TO FDS PLACED AS MARGIN MONEY WITH BANKS FOR OBTAINING CREDIT FACILITIES AN D ALSO WITH RESPECT TO EXCLUSION OF EXPENDITURE INCURRED ON ACCOUNT OF INS URANCE, INTERNET CHARGES, TELEPHONE CHARGES, FROM THE TERM EXPORT TURNOVER FOR THE PURPOSE OF COMPUTATION OF RELIEF UNDER SECTION 10A. 3. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATI VE, MR. JITENDRA YADAV, ON BEHALF OF THE REVENUE AND THE LEARNED COU NSEL, MR. NITESH JOSHI, ON BEHALF OF THE ASSESSEE. 4. BOTH THE REPRESENTATIVES HAD RELIED ON NUMBER OF CA SE LAWS IN SUPPORT OF THEIR CONTENTIONS. WE WOULD BE CONSIDERING THEM IN DUE COURSE WHEREVER NECESSARY. 5. THE FIRST ISSUE IS WHETHER THE INTEREST INCOME IN Q UESTION IS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS OR UNDER THE HEAD INCOME FROM OTHER SOURCES . 6. THE UNDISPUTED FACTS IN THIS CASE ARE THAT, THE INT EREST IN QUESTION WAS RECEIVED ON FIXED DEPOSIT PLACED WITH BANKS FOR THE PURPOSE OF OBTAINING CREDIT FACILITIES. THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S INDO SWISS JEWELS LTD., [2006] 284 ITR 389 (BOM.), HAS HELD AS UNDER:- HELD, DISMISSING THE APPEAL, THAT FROM THE FACTS AN D CIRCUM-STANCES OF THE PRESENT CASE IT WAS CLEAR THAT THE INTER-CORPOR ATE DEPOSITS WERE MADE BY THE ASSESSEE FROM THE SURPLUS FUNDS THAT WE RE SET APART FOR PAYMENT FOR IMPORTED MACHINERY. THE INTEREST EARNED ON THE SHORT TERM DEPOSITS OF THE MONEY KEPT APART FOR THE PURPO SES OF BUSINESS HAD TO BE TREATED AS INCOME EARNED FROM BUSINESS AN D COULD NOT BE TREATED AS INCOME FROM OTHER SOURCES. 7. SIMILARLY, WE FIND THAT MUMBAI J BENCH OF THIS TR IBUNAL IN ITO V/S M/S. JEWELEX INTERNATIONAL P. LTD., ITA NO.3302/MUM ./2009, ORDER DATED 30 TH SEPTEMBER 2010, VIDE PARAS-5 AND 6 AT PAGES-4 & 5, HELD AS FOLLOWS:- M/S. GREYTRIX (I) PVT. LTD. ITA NO. 5787/MUM./2009 3 5. WE HAVE CAREFULLY CONSIDERED THE FACTS AND THE R IVAL CONTENTIONS. THERE IS NO DISPUTE THAT THE INTEREST WAS RECEIVED FROM MARG IN MONIES KEPT AS DEPOSITS WITH THE BANKS FOR THE PURPOSE OF BORROWING MONIES FOR THE BUSINESS. THE ASSESSEES BUSINESS IS IN THE EXPORT OF JEWELLERY A ND IN THE FIRST PAGE OF THE ASSESSMENT ORDER IT HAS BEEN STATED BY THE ASSESSIN G OFFICER THAT THE ASSESSEE IS A 100% EXPORT ORIENTED UNDERTAKING WITHIN THE ME ANING OF SECTION 10B. IF THAT IS THE FACTUAL POSITION, THE INTEREST HAS TO BE CON SIDERED AS HAVING BEEN DERIVED FROM THE EXPORT OF THE ARTICLES. EVEN IF IT IS ARGU ED THAT THE IMMEDIATE SOURCE OF THE INTEREST IS THE DEPOSITS WITH THE BANKS AND NOT THE EXPORT OF ARTICLES, IN VIEW OF SUB-SECTION (4) OF SECTION 10B THE ASSESSEE IS ENTI TLED TO SUCCEED. THE ASSESSING OFFICER HAS NOT ASSESSED THE INTEREST UND ER THE HEAD INCOME FROM OTHER SOURCES. HE HAS TREATED THE INTEREST AS PART OF THE PROFITS OF THE ASSESSEES BUSINESS. SUB-SECTION (4) OF SECTION 10B STATUTORIL Y PRESCRIBES A FORMULA AS TO WHAT SHOULD BE CONSIDERED AS PROFITS DERIVED FROM E XPORT OF ARTICLES. THE PROFITS OF THE BUSINESS OF THE UNDERTAKING ARE TO BE ASCERT AINED FIRST AND THE NEXT STEP IS TO BIFURCATE THE SAME IN THE SAME PROPORTION AS THE EXPORT TURNOVER IN RESPECT OF THE ARTICLES BEARS TO THE TOTAL TURNOVER OF THE BUS INESS CARRIED ON BY THE UNDERTAKING. IF THE INTEREST INCOME FORMS PART OF T HE PROFITS OF THE BUSINESS OF THE UNDERTAKING, THEN IN THE LIGHT OF THE STATUTORY FOR MULA THE RESULTANT FIGURE AFTER APPLYING THE FORMULA HAS TO BE STATUTORILY CONSIDER ED AS PROFITS DERIVED FROM EXPORT OF ARTICLES. IN THE PRESENT CASE THE INTERES T HAVING BEEN ASSESSED AS PART OF THE PROFITS OF THE BUSINESS OF THE UNDERTAKING, THE FORMULA HAS TO BE APPLIED AND SUB-SECTION (4) LEAVES NO CHOICE. IN THIS VIEW OF THE MATTER WE ARE IN AGREEMENT WITH THE SUBMISSION OF THE LEARNED COUNSE L FOR THE ASSESSEE. 6. THE LEARNED COUNSEL FOR THE ASSESSEE IS RIGHT IN HIS SUBMISSION THAT IN THE CASE OF SECTION 80HHC, WHICH WAS CONSIDERED BY THE SUPREME COURT IN K RAVINDRANATHAN NAIR (SUPRA), THERE IS A SPECIFIC EX PLANATION (BAA) WHICH EXCLUDES 90% OF THE INTEREST, EVEN IF IT IS ASSESSE D AS BUSINESS INCOME, FROM THE PROFITS OF THE BUSINESS. HOWEVER, SUB-SECTION (4) O F SECTION 10B CONTAINS NO SUCH EXCLUSION NOR IS THERE ANY OTHER PROVISION IN THE S ECTION SIMILAR TO EXPLANATION (BAA) OF SECTION 80HHC. IN LIBERTY INDIA (SUPRA), T HE SUPREME COURT WAS CONCERNED WITH SECTIONS 80-I, 80-IA AND 80-IB. IN T HESE SECTIONS ALSO THERE IS NO STATUTORY FORMULA TO PRESCRIBE AS TO WHAT ARE THE P ROFITS ELIGIBLE FOR THE DEDUCTION. THERE IS NO STATUTORY PRESCRIPTION OF SUCH PROFITS AS IN SUB-SECTION (4) OF SECTION 10B. SUB-SECTION (5) OF SECTION 80-IA, WHICH ALSO H AS TO BE READ AS PART OF SECTION 80-IB PROVIDES THAT THE PROFITS OF AN ELIGI BLE BUSINESS SHALL BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS IS THE ONLY SOURCE OF INCOME OF THE ASSESSEE. THIS IS NOT SIMILAR TO THE STATUTORY FORMULA PRESCRIBED IN SUB-SECTION (4) OF SECTION 10B. IT CANNOT ALSO BE STATED THAT THE ASSESSEE WAS ADOPTIN G A DEVICE TO INFLATE THE PROFITS OF THE EXPORT ORIENTED UNDERTAKING BY INCLU DING THE INTEREST INCOME THEREIN BECAUSE EVEN THE ASSESSING OFFICER DID NOT DISPUTE THAT THE INTEREST INCOME FORMS PART OF THE BUSINESS PROFITS. ONCE SUCH A CON CLUSION IS REACHED, SUB- SECTION (4) OF SECTION 10B TAKES OVER. FOR THESE RE ASONS WE UPHOLD THE DECISION OF THE CIT(A) AND DISMISS THE FIRST GROUND TAKEN BY THE REVENUE. THIS DECISION APPLIES ON ALL FOURS IN THE CASE ON H AND AS FACTS ARE IDENTICAL. 8. THE AFORESAID DECISION IS ALSO IN LINE WITH THE ORD ER PASSED BY THE BANGALORE A BENCH OF THIS TRIBUNAL IN ACIT V/S MO TOROLA INDIA ELECTRONICS M/S. GREYTRIX (I) PVT. LTD. ITA NO. 5787/MUM./2009 4 PVT. LTD., 114 ITD 387 (BANG.), WHEREIN THE CHANGE OF LAW FROM ASSESSMENT YEAR 2001-02, HAS BEEN TAKEN NOTE OF. 9. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE F OLLOWING CASE LAWS:- RENAISSANCE JENEDRY PVT. LTD., 101 ITD 380; MIRACLE SOFTWARE INDIA LTD., 45 SOT 203; GEM PLUS JEWELLERY INDIA LTD., [2011] 330 ITR 0175; CHANGEPOND TECHNOLOGIES PVT. LTD. V/S ACIT, 119 TTJ 18; 10. WE HAVE CONSIDERING THE AFORESAID DECISIONS CITED B Y THE LEARNED DEPARTMENTAL REPRESENTATIVE. WE FIND THAT IN ALL TH ESE CASES, THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN GEM PLU S JEWELLERY INDIA LTD. (SUPRA) WAS NOT CONSIDERED AS IT WAS NOT AVAILABLE. THE PROVISIONS OF SECTION 10A WAS CONSIDERED IN THIS CASE AND AT PARAS-4 TO 6 , THE HONBLE COURT HELD AS FOLLOWS:- 4. UNDER SUB-S. (1) OF S. 10A A DEDUCTION IS ALLOW ED 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 O R COMPUTER SOFTWARE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS CO MMENCING FROM THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE UNDERTAKING BEGINS MANUFACTURE OR PRODUCTION. SUB-S . (4) OF S. 10A PROVIDES THE MANNER IN WHICH THE PROFITS DERIVED FR OM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE CO MPUTED. SUB-S. (4) PROVIDES AS FOLLOWS:- 'FOR THE PURPOSES OF SUB-SS. (1) AND (1A), THE PROF ITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUT ER SOFTWARE SHALL BE THE AMOUNT WHICH BEARS TO THE PRO FITS OF THE BUSINESS OF THE UNDERTAKING, THE SAME PROPORTI ON AS THE EXPORT TURNOVER IN RESPECT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE BEARS TO THE TOTAL TURNOVER OF TH E BUSINESS CARRIED ON BY THE UNDERTAKING.' 5. UNDER SUB-S. (4) THE PROPORTION BETWEEN THE EXPO RT TURNOVER IN RESPECT OF THE ARTICLES OR THINGS, OR AS THE CASE M AY BE, COMPUTER SOFTWARE EXPORTED, TO THE TOTAL TURNOVER OF THE BUS INESS CARRIED OVER BY THE UNDERTAKING IS APPLIED TO THE PROFITS OF THE BUSINESS OF THE UNDERTAKING IN COMPUTING THE PROFITS DERIVED FROM E XPORT. IN OTHER WORDS, THE PROFITS OF THE BUSINESS OF THE UNDERTAKI NG ARE MULTIPLIED BY THE EXPORT TURNOVER IN RESPECT OF THE ARTICLES, THI NGS OR, AS THE CASE MAY BE, COMPUTER SOFTWARE AND DIVIDED BY THE TOTAL TURNOVER OF THE M/S. GREYTRIX (I) PVT. LTD. ITA NO. 5787/MUM./2009 5 BUSINESS CARRIED ON BY THE UNDERTAKING . THE FORMULA WHICH IS PRESCRIBED BY SUB-S. (4) OF S. 10A IS AS FOLLOWS : TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UN DERTAKING THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAK ING WOULD CONSIST OF THE TURNOVER FROM EXPORT AND THE TURNOVER FROM L OCAL SALES. THE EXPORT TURNOVER CONSTITUTES THE NUMERATOR IN THE FO RMULA PRESCRIBED BY SUBS. (4). EXPORT TURNOVER ALSO FORMS A CONSTITUENT ELEMENT OF THE DENOMINATOR IN AS MUCH AS THE EXPORT TURNOVER IS A PART OF THE TOTAL TURNOVER. THE EXPORT TURNOVER, IN THE NUMERATOR MUS T HAVE THE SAME MEANING AS THE EXPORT TURNOVER WHICH IS A CONSTITUE NT ELEMENT OF THE TOTAL TURNOVER IN THE DENOMINATOR. THE LEGISLATURE HAS PROVIDED A DEFINITION OF THE EXPRESSION 'EXPORT TURNOVER' IN E XPLN. 2 TO S. 10A BY WHICH THE EXPRESSION IS DEFINED TO MEAN THE CONSIDE RATION IN RESPECT OF EXPORT BY THE UNDERTAKING OF ARTICLES, THINGS OR CO MPUTER SOFTWARE RECEIVED IN OR BROUGHT INTO INDIA BY THE ASSESSEE I N CONVERTIBLE FOREIGN EXCHANGE BUT SO AS NOT TO INCLUDE INTER ALIA FREIGH T, TELECOMMUNICATION CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY O F THE ARTICLES, THINGS OR SOFTWARE OUTSIDE INDIA. THEREFORE IN COMPUTING T HE EXPORT TURNOVER THE LEGISLATURE HAS MADE A SPECIFIC EXCLUSION OF FR EIGHT AND INSURANCE CHARGES. THE SUBMISSION WHICH HAS BEEN URGED ON BEHALF OF TH E REVENUE IS THAT WHILE FREIGHT AND INSURANCE CHARGES ARE LIABLE TO B E EXCLUDED IN COMPUTING EXPORT TURNOVER, A SIMILAR EXCLUSION HAS NOT BEEN PROVIDED IN REGARD TO TOTAL TURNOVER. THE SUBMISSION OF THE REVENUE, HOWEVER, MISSES THE POINT THAT THE EXPRESSION 'TOTAL TURNOVE R' HAS NOT BEEN DEFINED AT ALL BY PARLIAMENT FOR THE PURPOSES OF S. 10A. HOWEVER, THE EXPRESSION 'EXPORT TURNOVER' HAS BEEN DEFINED. THE DEFINITION OF 'EXPORT TURNOVER' EXCLUDES FREIGHT AND INSURANCE. S INCE EXPORT TURNOVER HAS BEEN DEFINED BY PARLIAMENT AND THERE I S A SPECIFIC EXCLUSION OF FREIGHT AND INSURANCE, THE EXPRESSION 'EXPORT TURNOVER' CANNOT HAVE A DIFFERENT MEANING WHEN IT FORMS A CON STITUENT PART OF THE TOTAL TURNOVER FOR THE PURPOSES OF THE APPLICAT ION OF THE FORMULA. UNDOUBTEDLY, IT WAS OPEN TO PARLIAMENT TO MAKE A PR OVISION TO THE CONTRARY. HOWEVER, NO SUCH PROVISION HAVING BEEN MA DE, THE PRINCIPLE WHICH HAS BEEN ENUNCIATED EARLIER MUST PREVAIL AS A MATTER OF CORRECT STATUTORY INTERPRETATION. ANY OTHER INTERPRETATION WOULD LEAD TO AN ABSURDITY. IF THE CONTENTION OF THE REVENUE WERE TO BE ACCEPTED, THE SAME EXPRESSION VIZ. 'EXPORT TURNOVER' WOULD HAVE A DIFFERENT CONNOTATION IN THE APPLICATION OF THE SAME FORMULA. THE SUBMISSION OF THE REVENUE WOULD LEAD TO A SITUATION WHERE FREIGHT AND INSURANCE, THOUGH IT HAS BEEN SPECIFICALLY EXCLUDED FROM 'EXPO RT TURNOVER' FOR THE PURPOSES OF THE NUMERATOR WOULD BE BROUGHT IN AS PA RT OF THE 'EXPORT TURNOVER' WHEN IT FORMS AN ELEMENT OF THE TOTAL TUR NOVER AS A DENOMINATOR IN THE FORMULA. A CONSTRUCTION OF A STA TUTORY PROVISION WHICH WOULD LEAD TO AN ABSURDITY MUST BE AVOIDED. [EMPHASIS OWN] 11. THE HON'BLE SUPREME COURT, WHILE CONSIDERING SIMILA R PROVISIONS UNDER SECTION 80HHC(3) OF THE ACT IN MYSODET (P) LTD. V/S CIT (2008) 305 ITR 276 (SC), AT PARA-8, HELD AS FOLLOWS:- M/S. GREYTRIX (I) PVT. LTD. ITA NO. 5787/MUM./2009 6 THUS, IN THE CASE OF AN ASSESSEE WHO IS DOING EXPOR T BUSINESS EXCLUSIVELY, EXPORT TURNOVER AND TOTAL TURNOVER W OULD BE IDENTICAL, IF THE ENTIRE SALE PROCEEDS ARE BROUGHT INTO INDIA IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE PRESCRIBED TIME-LIMIT. IN THAT CASE, THE ENTIRE PROFIT UNDER THE HEAD PROFITS AND GAINS OF BUSINES S OR PROFESSION (WHICH WILL INCLUDE THE THREE EXPORT INCENTIVES) WI LL BE DEDUCTIBLE UNDER S. 80HHC . HOWEVER, IN ORDER TO ARRIVE AT THE AMOUNT DEDUCTI BLE UNDER S. 80HHC IN THE CASE OF AN ASSESSEE DOING EXPORT BU SINESS AS WELL AS SOME OTHER DOMESTIC BUSINESS, THE FRACTION OF EXPO RT TURNOVER TO TOTAL TURNOVER, WILL BE APPLIED TO HIS PROFITS CO MPUTED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION (WHIC H AGAIN WILL INCLUDE THE THREE EXPORT INCENTIVES). THE OPERATION OF S. 80HHC R/W S. 28, AS AMENDED BY THE FINANCE ACT, 1990, CAN BE ILLUSTRATED BY WAY OF THE FOLLOWING EX AMPLES : CODE I (SIC-CODE II (SIC-CODE III (SIC-CODE IV (SIC-CASE C ASE I) CASE II) 2/3 CASE III) IV) 1/3 EXPORT EXCLUSIVELY EXPORT 1/3 E XPORT 1/2 2/3 DOMESTIC SALE EXPORT BUSINESS DOMESTIC SALE DOMESTI C SALE (FIGURES IN LAKHS OF RUPEES) (I) TURNOVER (A) FOB EXPORTS 100 1 00 100 100 (B) OMESTIC RATE 50 100 200 (C) TOTAL TURNOVER 100 15 0 200 300 (II) BUSINESS PROFITS 10 15 20 30 BEFORE INCENTIVES (ASS UMED FIGURES) (III) CCS, DDK, I/L 10 10 10 10 TOTAL PROFITS OF THE 20 2 5 30 40 BUSINESS (IV) DEDUCTION UNDER S. 20.00 25 X 00/150 30 X 100/ 200 40 X 100/300 80HHC IF ENTIRE EXPORT = 16.67 = 15.00 = 13.33 PROC EEDS, I.E. RS. 100 LAKHS IS BROUGHT INTO INDIA WITHIN THE STIPULATED P ERIOD (V) DEDUCTION U/S 80HHC 20 X 50/100 25 X 50/150 30 X 50/200 40 X 50/300 IF ONLY 50 PER CENT OF THE = 10.00 = 8.33 = 7.50 = 6.67' EX PORT PROCEEDS I.E., RS. 50 LAKHS IS BROUGHT INTO INDIA THE ABOVE CIRCULAR INDICATES VIDE PARA 4 OF THE CIRCULAR THAT S. 80HHC(3) STATUTORILY FIXES THE QUANTUM OF DEDUCTION ON THE BASIS OF A PROPORTION OF BUSINESS PROFITS UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' IRRESPECTIVE OF WHAT COULD STRICTLY BE DESCRIBED AS PROFITS DERIVED FROM EXPORT OF GOODS OUT OF INDIA. EVEN IN CL. 9 THE ILLUSTRATION GIVEN INDI CATES THAT THE RATIO MENTIONED IN SUB-S. (3) HAS TO BE APPLIED TO BUSINE SS PROFITS COMPUTED UNDER THE PROVISIONS OF SS. 28 TO 43D OF THE IT ACT . THIS CIRCULAR SUPPORTS THE REASONING GIVEN BY US IN OUR JUDGMENT HEREINABOVE. FOR THE ABOVE REASONS, WE ALLOW THIS CIVIL APPEAL B Y SETTING ASIDE THE IMPUGNED JUDGMENT OF THE HIGH COURT WITH NO ORDER A S TO COSTS. WE MAKE IT CLEAR THAT OUR REASONING IS STRICTLY APPLIC ABLE TO THE LAW AS IT STOOD DURING THE RELEVANT ASSESSMENT YEAR. [EMPHAS IS OWN] 12. THESE JUDGMENTS OF THE HON'BLE JURISDICTIONAL HIGH COURT AS WELL AS THE HON'BLE SUPREME COURT CONFIRM THE VIEW OF THE TRIBU NAL IN M/S. JEWELEX INTERNATIONAL P. LTD. (SUPRA). THUS, WE RESPECTFULL Y FOLLOW THE SAME AND UPHOLD THE FINDINGS OF THE COMMISSIONER (APPEALS) A ND DISMISS THE GROUNDS NO.2 AND 3 RAISED BY THE REVENUE. M/S. GREYTRIX (I) PVT. LTD. ITA NO. 5787/MUM./2009 7 13. COMING TO GROUND NO.4, THE LEARNED COUNSEL HAS RIGH TLY POINTED OUT THAT THIS GROUND IS MISCONCEIVED, AS THE COMMISSION ER (APPEALS) HAS DIRECTED THAT THE EXPENDITURE IN QUESTION ARE REQUI RED TO BE REDUCED BOTH FROM EXPORT TURNOVER AS WELL AS FROM TOTAL TURNOVER . THIS DECISION IS IN LINE WITH THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIG H COURT IN GEM PLUS JEWELLERY INDIA LTD. (SUPRA). THUS, THIS GROUND IS ALSO DISMISSED. 14. GROUNDS NO.1 AND 5, BEING GENERAL IN NATURE, HENCE, NO SEPARATE ADJUDICATION IS REQUIRED. 15. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH OCTOBER 2011. SD/- R.V. EASWAR PRESIDENT SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: OCTOBER 2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, G BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI