The Supreme Court, in CIT vs M/S Yokogawa India Ltd, has held that Section 10A of the Income Tax Act is a provision for deduction and not exemption. However, the court clarified that the stage of deduction would be while computing the gross total income of the eligible undertaking and not at the stage of computation of the total income. The bench headed by Justice Ranjan Gogoi observed that introduction of the word ‘deduction’ in Section 10A by the amendment embodies a clear enunciation of the legislative decision to alter its nature from one providing for exemption to one providing for deductions. The court also said that though the difference between the two expressions ‘exemption’ and ‘deduction’, may appear to be the same i.e. immunity from taxation, the practical effect of it would be wholly different. The court also observed that retention of Section 80HHC and 80HHE of the Income Tax Act, despite the amendment of Section 10A, indicates that some additional benefits to eligible Se...