These are two separate appeals by Revenue directed against two separate orders of learned CIT(A)-I, Surat, of even date, i.e., 28th Feb., 2005, and assessment year under reference is 1999-2000. As these appeals were heard together and involve common issue, these are being disposed of by common order. only issue under appeal relates to allowance of exemption under s. 10B of IT Act, 1961 ("Act" hereinafter), at Rs. 19,57,116 (ITA No. 1263/Ahd/2005) and Rs. 16,00,825 (ITA No. 1264/Ahd/2005), i.e., as claimed by assessee(s) which stood earlier disallowed by AO vide his order under s. 143(3) of Act, dt. 28th March, 2002 and 29th March, 2002, respectively. facts of case in brief are that this matter had been earlier heard by first appellate authority and assessee s appeal allowed vide order dt. 9th Sept., 2002. In second appeal, Tribunal (Ahmedabad Bench C ) in Appeal No. 3660 and 3662/Ahd/2002 (for two respondent-assessees), vide its order dt. 30th Sept., 2004, remitted matter back to file of CIT(A) for fresh adjudication in terms of s. 250(6) on two issues under appeal, i.e., grant of exemption under s. 10B, and deletion of addition on account of interest to GSFC, being, in its opinion, rendered without necessary recording of reasons (refer paras 4 and 5 of said order). learned CIT(A), however, vide impugned order stated that this earlier order was not rendered per incuriam, but supported by reasons, placing reliance, through reproduction of his earlier order dt. 9th Sept., 2002 for purpose. Before us, learned Departmental Representative relied upon order o f AO, adverting to various deficiencies observed by AO in assessee s claim under s. 10B of Act. learned Authorised Representative, on other hand, stated that CBDT has since, i.e., subsequent to impugned order, vide its Circular No. 1 of 2005, dt. 6th Jan., 2005 [(2005) 193 CTR (St.) 85] clarified, in response to various representations received by it from various quarters, that undertaking set up in Domestic Tariff Area (DTA) which is subsequently approved as 100 per cent export-oriented undertaking (EOU) by competent authority, would be eligible for deduction under s. 10B of Act. Copy of relevant circular stands placed at paper book (PB) pp. 71 to 72. He further contended that each of three objections, as raised by AO, with regard to non-satisfaction of prerequisite conditions by assessee (for valid claim under s. 10B), is properly countered with evidence, already placed on record and which stands duly cognized and appreciated by learned CIT(A) while adjudicating in matter. Specifically: (a) assessee s export sales being not out of India but only to another 100 per cent EOU: Reference in this context was made to paras 9.10(c), 9.11, 10.2(b) of Chapter IX of Exim Policy 1992-1997, which deems sale by EOU to another EOU as export, to be counted towards fulfillment of its obligation in respect of Net Foreign Exchange Earning (NFEE) and Export Performance (EP), provided same (goods sold) are permissible for procurement in terms of para 9.2 of policy. (b) Trading turnover: turnover of assessee-company during relevant previous year is in respect of weaving of grey cloth (Rs. 407 lakhs) and trading in yarn (Rs. 280 lakhs). As said trading does not amount to manufacturing activity, it defeats assessee s claim of being EOU involved only in manufacturing activity. learned Authorised Representative, however, points out that no trading has taken place after date of approval for EOU by competent authority, i.e., 20th Sept., 1998. And further, no claim in respect of such trading profits stands claimed for deduction under s. 10B. As such, activity prior to cut-off date, i.e., with reference to which assessee becomes eligible for deduction under said section, cannot be construed against assessee. (c) Unit formed through splitting up/reconstruction of existing unit: As no new investment in plant and machinery was observed by AO during relevant previous year, he inferred conversion of existing unit, upon its approval as EOU, as conversion of existing unit as 100 per cent EOU, and which would clearly disqualify same for benefits, which, presumably, stands reserved only for new units. learned Authorised Representative, in this regard, refers to aforesaid circular of CBDT which is clearly on point, i.e., approval as 100 per cent EOU being accorded by competent authority subsequent to date said unit commenced its production, and simultaneously restricting exemption to unexpired period of 10 successive years therefrom. We have heard parties before us and also perused material on record. We find, for reasons aforestated, as also noted hereafter, that each of three basic defects in assessee s claim for exemption under s. 10B stands effectively met by assessee. As regards objection No. 1, section does not stipulate requirement for sale proceeds of goods produced by assessee s undertaking to be received in convertible foreign exchange and as necessary precondition for being exigible as qualifying unit, as, for example, is in case of some other sections relating to export income, viz., ss. 80HHC and 80HHE. Further, s. 10B stands amended w.e.f. 1st April, 2001 to provide for same, and which, therefore, by implication, only proves assessee s contention, i.e., of no such requirement being in place as law stood at relevant time. Further, word "export", in absence of any specific definition under Act, would necessarily have to be interpreted in accordance with meaning ascribed to said word under relevant exim policy, and which, as stated earlier, deems sale by one EOU to another as export. In instant case, it is not disputed that assessee s produce stands sold to another EOU against relevant declaration in Form CT3, sample of which stands also adduced as exhibit at paper book p. 39. As such, we do not find any merit in this objection of Revenue. next objection relates to trading turnover of assessee, and which has been construed as disqualifying assessee s undertaking for exemption under s. 10B. said deduction, as stated, and which appears to be not in dispute, stands claimed only in respect of profits accruing to assessee from said undertaking after date of grant of approval as EOU. As such, it i s difficult to see as to how its activities prior thereto could be regarded as disentitling it in respect of its otherwise valid claim in respect of its operations subsequent to that date. undertaking, it may be appreciated, stands recognized as EOU, and thus subject to its qualifying criteria, as well as those stipulated under Act, only of and from date on which it stands recognized as such. Further, sub-s. (2) of 10B which enumerates qualifying criteria, vide cl. (ia) thereof, requires export of at least 75 per cent of sale of goods manufactured or produced by EOU. As such, criteria of minimum level of export is only with reference to goods manufactured/ produced by undertaking, and independent of any other activity, including trading activity, engaged in by assessee. assessee may, in given case, export 100 per cent of its bought out goods, but that would not entitle it for exemption under s. 10B; export to be reckoned for purpose being only in respect of goods manufactured/produced by it. Therefore, as long as profits from trading activity are not considered for deduction under s. 10B, we do not consider any adverse inference as enuring to assessee on account of same. This disqualification is, again, therefore, superfluous. third disqualification that assessee purportedly suffers from is, that its undertaking, being not new one, thus, stands formed by splitting up, or reconstruction of business already in existence, and, therefore, excluded by virtue of s. 10B(2)(ii). We fail to understand as to how this inference stands drawn in facts and circumstances of present case; there being no splitting-up or reconstruction involved or adverted to by AO himself. condition apparently is only to prevent claims where undertaking is formed through division, reconstruction, and like, of resources already in existence, while in present case ownership, management and control of assets of business continued to vest in same assessee, both prior to and subsequent to its being accorded approval. Rather, CBDT circular, adverted to earlier, clarifies this matter, if at all one was required, beyond any doubt. And fact that exemption period stands curtailed in respect of such units, to balance unexpired portion of eligible period, only ensures that no undue advantage is availed by existing units, which would otherwise qualify for exemption, though only at or with reference to future date, and not from first day of their operations. In view of foregoing, we find that none of debilitating defects in assessee s claim under s. 10B as pointed out by Revenue survive and hence, there is no infirmity in order of learned CIT(A), which is hereby upheld. learned Departmental Representative has also, during course of hearing, pointed out that assessee has not substantiated its claim by maintaining separate accounts in respect of its eligible undertaking. While we admit this objection of Revenue as valid, it would not, thereby, disentitle assessee s claim, which factor would only facilitate determination of correct quantum of profits as eligible for deduction. In its absence, therefore, onus to prove that no income, i.e., apart from that earned by assessee s eligible undertaking, stands included for deduction under s. 10B, is clearly on assessee. And which aspect of matter is definitely be looked into by AO, who is duty-bound to allow assessee s claims only in accordance with law. As such, we do not consider it necessary or relevant to issue any specific directions on this account. We order accordingly. In result, appeals are dismissed. *** INCOME TAX OFFICER v. ANITA SYNTHETICS (P) LTD.