Penta Media Graphics Ltd. v. Deputy Commissioner of Income Tax, Company Circle VI(1), Chennai

1. FACTS OF THE CASE

The assessee challenged ITAT’s order dated 31 December 2007 in ITA 2515/Mds/2005. The question was whether unrealised sale proceeds of Rs.6,127 lakh, already reduced from export turnover, should also be reduced from total turnover when computing section 10B deduction.

Source: Opening paragraph and framed question; PDF pp.1–2

2. DISCUSSION BY THE COURT

The assessee cited Teledata Informatics, TCA 741/2010, decided 3 December 2019, (2019) SCC OnLine Mad 14688. The Court reproduced its reasoning on corresponding exclusion of foreign-exchange technical-service expenditure from total turnover to preserve the computation formula. Revenue raised no serious objection and conceded the legal position.

Source: Paragraphs 2–3; PDF p.2

3. JUDICIAL DECISION

The Court held that the Rs.6,127 lakh unrealised proceeds reduced from export turnover should also be reduced from total turnover. The question was answered for the assessee and the appeal allowed without costs.

Source: Paragraphs 4–5; PDF p.3

4. OUTCOME

The assessee obtained the matching denominator adjustment. The order does not quantify the resulting deduction or decide that the unrealised proceeds qualify for export turnover.

Source: Paragraph 4; PDF p.3

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Symmetry corrects the ratio without validating the excluded receipt

The Court accepted the existing reduction from export turnover as the starting point and required the same amount to leave total turnover. The relief concerns computation symmetry; it does not establish later realisation, extend a receipt deadline or restore the proceeds to the numerator.

Source: PDF p.2 · PDF p.3

The cited analogy and the operative subject differ

Teledata’s reproduced passage concerns technical-service expenditure in foreign exchange, whereas this appeal concerns unrealised sale proceeds. The Bench applied that computational approach and Revenue conceded the legal position. Preserve the distinction when citing the case; technical-service expenses were not newly found to be the taxpayer’s Rs.6,127 lakh item.

Source: PDF p.2 · PDF p.3

The amount is established, but the final calculation is not

The operative paragraph prints Rs.6,127 lakh. The original contains edge clipping in parts of the question, so the clear operative text is the safer locator. The full profit and turnover figures and assessment year are absent; a revised computation requires those underlying records.

Source: PDF p.3