This appeal has been filed by assessee on 11th Feb., 2005 against order of learned CIT(A)-XIV, New Delhi, dt. 24th Dec., 2004 in case of assessee in relation to assessment order under s. 143(3)(ii) of Act for asst. yr. 2001-02. only dispute in this appeal is directed against assessee not being allowed deduction under s. 80HHB as claimed by assessee. Facts of case leading to this dispute briefly are that during course of assessment proceedings, assessee claimed deduction under s. 80HHB amounting to Rs. 82,73,068. assessee claimed this deduction in relation to its business transaction with M/s MTN Network (P) Ltd., Sri Lanka and Telekom Networks Malawi (P) Ltd., Malawi. According to AO assessee s agreement with MTN Network (P) Ltd. showed that assessee had right to sub-license prepaid software of Total Tel International, company based in Australia, and in that capacity assessee had provided turnkey system for management of prepaid telecommunication services and related services to MTN Networks (P) Ltd. (hereinafter called "Carrier"). assessee-company was also charging maintenance and support fee from Carrier on warranties provided to them on behalf of Total Tel. assessee entered into similar agreement with Telekom Networks Malawi (P) Ltd., Malawi. learned AO asked assessee to show cause as to why deduction under s. 80HHB should not be disallowed as assessee-company had only provided services which were of maintenance and consultancy nature. In reply assessee submitted that apart from export of hardware and software, assessee had also executed turnkey projects and installation of projects. This amounted to be "a foreign project" undertaken outside India. Provisions of s. 80HHB(2)(b) included activities, commitments and obligations ancillary and incidental to execution of foreign project and it could not be restricted to mere physical activities or installation of machinery and plant. utilization of technical knowledge and rendering of technical services so as to bring about construction, assembly and installation in project was eligible for deduction under s. 80HHB. learned AO held that in case of assessee contract agreements showed that obligations of assessee as mentioned in cl. 3 of agreements were restricted to maintenance, consultancy for purchase of third party hardware/software and to sub-license prepaid software of Total Tel. assessee had to ensure that construction of proposed system was done in accordance with contract conditions, technical specification and any amendments thereto and they were accepted by Carrier. These agreements also showed that limited obligation of assessee-company was to provide licence to use prepaid software of Total Tel; to provide sub-license to use support software; to obtain hardware and third party software as per specification of carrier; to provide installation and integration services; timely shipment of components and to provide maintenance, training and marketing services to Carrier. These works were of consultancy, maintenance and supervisory nature which could not be treated as integral part of execution of any project. From services of consultant, original agreement holder used its resources to optimal potential without wastage of time, manpower in terms of contract and increased its efficiency to some extent. Merely giving consultancy and maintenance of system till installation or providing licence did not result into actual execution of any project. Based on this reasoning learned AO rejected assessee s claim of deduction under s. 80HHB. During course of hearing before learned CIT(A), assessee submitted that during course of assessment proceedings under s. 143(3) for asst. yr. 1999-2000, assessee had furnished same agreement with Carrier. AO after examining details and agreement allowed assessee deduction under s. 80HHB for asst. yr. 1999-2000. facts of assessee s case for asst. yr. 2001-02 were same. While denying assessee deduction, learned AO totally misinterpreted and had drawn wrong inferences and conclusions that assessee had discharged restricted or limited obligations and did not satisfy conditions laid down under s. 80HHB. assessee submitted that preamble of agreement opened with t h e words, "Estel agrees to provide system and related services to Carrier and Carrier agrees to purchase system and related services in terms and conditions set out in agreement". Clause 3 of agreement obliged assessee to grant Carrier licence to use prepaid software, obliged assessee to grant Carrier licence to use prepaid software, sub-license to use support software and to obtain for Carrier hardware and third party software. assessee was also required to provide Carrier with installation and integration services; maintenance and support services; training services and marketing services. assessee was obliged to follow delivery schedule, that is shipment of all components and systems and installation and integration of system within stipulated time and in accordance with contract conditions, technical specifications, etc. accepted by Carrier. It was not understood as to what learned AO meant by holding that assessee had restricted or limited obligation. AO did not specify what other main functions were required to be performed by contractor for being recognized as "execution of project". On facts of case admitted by learned AO himself it was apparent that assessee had executed foreign project. assessee argued that it had granted license and sub-license to Carrier and Telekom Malawi (P) Ltd. in their own right. assessee had provided as independent contractor system consisting of prepaid software and third party software integrated with or installed on hardware in accordance with terms of agreement. Maintenance and support fee had been charged by assessee from Carrier and Malawi only after expiry of warranty period which had been arranged back to back with supplier of software and hardware and not on basis of warranty provided by Total Tel or on their behalf, as stated by AO. relationship between assessee and contractees was on principal to principal basis and there was no privy of contract between them and Total Tel. Total Tel provided software and services in terms of independent agreement entered into between assessee and Total Tel. assessee was placing orders on other vendors and suppliers also, for example, server from Compaq Computers, USA and Singapore, dialogic cards from Dialogic Cards, USA, software Informix from Sonata Technology Ltd., India and Compact Alfa Server and Accessories, Singapore. Software purchased from Total Tel was only one of items of project. assessee purchased hardware and software on principal to principal basis and did value add by way of installation and integration of whole system with telecom network of customer. As to sub-licensing, assessee explained that software was not commodity but intellectual propriety right of person who had created and developed software. It was marketed by way of licensing or sub-licensing for commercial use or use by customer. assessee argued that in terms of s. 80HHB(2)(b), foreign project meant "a project for assembly or installation of any machinery or plant outside India and execution of such other work (of whatever nature) as may be prescribed". This definition could not be restricted to mere physical activity or putting up super structure, machinery or plant but should be understood to take within its fold utilization of technical knowledge necessary to being about construction, assembly and installation. assessee relied upon judgment of Hon ble Supreme Court in case of Continental Construction Ltd. vs. CIT (1992) 101 CTR (SC) 386: (1992) 195 ITR 81 (SC) and also dictionary meaning of word "execution" as per Webster s dictionary. assessee emphatically argued that it had entered into independent contracts and Total Tel International, Australia had no contractual obligation with parties nor had it any financial interest or involvement in projects. learned AO was not justified in his contention that assessee had rendered services to Carrier on behalf of Total Tel. It was assessee who purchase software/hardware and it was assessee who received payments as per Payment Plan. assessee submitted that it had obtained letter from Total Tel, Australia with view to install and create confidence in assessee s capability to execute contract of foreign party according to specifications and schedule. assessee was authorized distributor of Total Tel in India and other countries. Therefore, in January, 1999. Total Tel issued comfort letter to Carrier. fact of matter was that assessee had only out sourced installation work and software and hardware to Total Tel, as would be seen from copies of purchase order placed by assessee with Total Tel. learned CIT(A) referred to letter dt. 22nd Jan., 1999 from Total Tel to Carrier, viz., MTN Networks (P) Ltd., Srilanka. She has reproduced extract from letter at p. 8 of impugned order. According to learned CIT(A) from letter it was clear that assessee was authorized distributor of Total Tel and Total Tel and assessee had been working together to sell, implement and support prepaid systems. assessee had also been implement and support prepaid systems. assessee had also been authorized by Total Tel to enter into sales and maintenance contract with carrier. responsibility of assessee was to ensure that hardware would reach site; assessee would sub-contract prepaid software customization, delivery, installation, commissioning including integration and acceptance back to Total Tel. It was clear from letter of Total Tel that it would provide complete hardware and software support to prepaid system to be installed at Carrier site in Srilanka as per contract between assessee and Carrier. Thus, it was clear that assessee was only marketing products of its principals, i.e., Total Tel and was also entering into agreements as authorized by them but for execution of agreement same was again sub-contracted to assessee s principal only. That showed that assessee was only marketing agent and was not doing any assembly or installation of any machinery or plant outside India by itself. No value addition was being done in work being executed. learned CIT(A) referred to agreement dt. 20th June, 1998 and item No. 9 of schedule attached to agreement. As per agreement it was clearly provided that Total Tel wish to appoint assessee-company to distribute product in territories specified in schedule. learned CIT(A) thereafter referred to certain terms and conditions in agreement between assessee-company with Carrier dt. 1st Feb., 1999. learned CIT(A) referred to following terms and conditions: "(i) On first page itself under head Background , it is mentioned Estel is authorized distributor of Total Tel International for India and Sri Lanka. By virtue of being Total Tel s distributors, Estel has right to enter into this contract with Carrier. Estel also has right to sub-license Total Tel s prepaid software and all third party software to carrier and to provide warranties on all software to Carrier on behalf of Total Tel..... As per this agreement, in schedule, it is mentioned that appellant-company has to provide prepaid software, supported software, hardware and services consisting of installation and integration services, training services and maintenance and support services. (ii) On page No. 12 of schedule, it is mentioned that system means , system consisting of prepaid software and third party software integrated with or installed on hardware in accordance with proposal and terms of agreement. (iii) On page No. 14 of schedule, in clause No. 3, under head Estel s obligation , in sub-cl. (c), it is mentioned obtain hardware and third party software to Carrier on term set out in cl. 7. On page No. 18 of schedule, clause No. 7 under head Purchase of system component , it is mentioned as under: In consideration for payment of system fee, Carrier hereby appoints Estel as Carrier s agent for purpose of... (a) Purchasing hardware and licensing third party software from such vendors as nominated by Estel on vendors then current purchase terms and conditions, and (b) Doing all such things with and in relation to hardware and third party software as required by Estel to perform its obligation under this agreement ." learned CIT(A) also referred to warranties and observed that assessee-company had taken warranties from Total Tel and other parties and had in turn given warranties to its customers. In other words warranties were back to back. learned CIT(A) held that from terms of agreement between assessee and Total Tel it was clear that assessee-company had entered into agreement with Total Tel as its market agent for "one year renewable automatically unless revoked in cl. 12". assessee had not produced any evidence that agreement had come to end. In letter dt. 22nd Jan., 1999 addressed to Carrier, Total Tel had stated that assessee was authorized distributor of Total Tel International in India and other countries, including Sri Lanka. This was further reiterated in agreement between assessee-company and Carrier dt. 1st Feb., 1999 under head "Background" wherein assessee was mentioned as authorized distributor of Total Tel International in India and Sri Lanka. same was case in Malawi agreement. According to learned CIT(A) if agreement entered into by assessee in Sri Lanka and Malawi were read with letter issued by Total Tel on 22nd Jan., 1999, it was clear that assessee was obtaining contracts on behalf of their principals. third party software and hardware was being purchased by assessee-company as per directions of Carrier and Malawi. assessee-company themselves were not actually installing project. At time when assessee-company entered into agreement with Carrier and Malawi assessee-company was distributor of Total Tel in India as well as Sri Lanka. agreements were entered into by assessee in that capacity. assessee-company itself did not execute any foreign project. While it was true that requirement of s. 80HHB was not that assessee itself should do execution and it could get work executed through its employees or through subcontract, but in case of assessee assessee was only distributor of its principal. On basis of reasoning as referred to in foregoing paragraphs, learned CIT(A) held that assessee-company was just marketing agent of M/s Total Tel and did not qualify for deduction under s. 80HHB of Act because foreign project meant project for assembly or installation of any machinery or plant outside India while assessee-company was only marketing agent. During course of hearing before us learned counsel for assessee submitted that assessee executed two projects in Sri Lanka and Malawi on turnkey basis by way of providing fully functional prepaid Mobile Telephony System for its clients. As this activity of assessee was covered for deduction under s. 80HHB(2)(b)(ii), assessee claimed deduction during course of assessment proceedings beginning from asst. yr. 1999-2000. For asst. yr. 1999-2000, assessee s claim of deduction of sum of Rs. 14,99,307 under s. 80HHB was accepted by AO in assessment proceedings under s . 143(3) after detailed examination of facts of case and provisions of law. For asst. yr. 2000-01 assessment was completed under s. 143(1)(a) and deduction . as claimed was allowed. During period relevant to asst. yr. 2001-02 assessee had carried out same activity as in earlier two years and accordingly claim under s. 80HHB was made in respect of years and accordingly claim under s. 80HHB was made in respect of assessee s receipts from project work during relevant previous year. However, AO rejected assessee s claim of deduction for totally untenable reasons. During course of execution of project, as above mentioned, assessee had supplied, installed, integrated, tested and commissioned prepaid telephony system. learned AO held without justification that assessee merely provided services of consultant and carried out maintenance of system. learned AO nowhere spelt out as to what more was required to be done in this context so as to qualify for deduction under s. 80HHB. It was true that assessee was not original technology inventor or original equipment manufacturer. assessee purchased software from Total Tel; support system from third party; hardware from Compaq, USA and Singapore, Dialogic I Cards, USA and so on. Deduction under s. 80HHB was not restricted to manufacturer alone and it was execution that was in focus and not development or manufacture of system. learned CIT(A) held that as assessee was distributor of Total Tel in India as well as Sri Lanka, assessee merely carried out distribution of Total Tel software. learned CIT(A) treated assessee to be marketing agent merely because Comfort Letter had been issued by Total Tel addressed to assessee s client in Sri Lanka. This letter was furnished to clients to establish assessee s credential and display any doubt in their minds about assessee s capacity to execute project. learned CIT(A) did not notice that agreement between assessee and its customers in Sri Lanka and Malawi were on principal to principal basis. agreements had been entered into by assessee at his own liabilities and risks and Total Tel was nowhere in picture. proceeds of project executed by assessee were appropriated by assessee and not shared with Total Tel. M/s Total Tel only received price of its software as it would have received from any other party, who adapted and integrated Total Tel software for their own purpose. learned counsel for assessee read aforesaid letter placed at p. 98 of paper book. He argued that while Total Tel assured Carried that they would supply software as per specification in attachment of contract between assessee and Carrier, letter also spelt out that it was assessee and Carrier who were parties to contract and not Total Tel. No part of expenditure incurred by Carrier in Sri Lanka was paid to Total Tel directly. amounts were paid as per contract to assessee in his own right and it was not carrier s outlook as to what assessee paid to Total Tel. learned counsel argued that it was not as if assessee sitting at his home office earned contract receipts. He referred to p. 101 of paper book and pointed out that assessee had charged for 180 port mobile software at rate of 207,000 US $, whereas cost to assessee of 180 Software CD purchased from Total Tel, Australia was 92,160 US$ only. Such huge price differential could not be there without there being any value add from assessee. learned counsel further pointed out that value of total system supplied by assessee was Rs. 3,73,04,180; whereas value of supply from Total Tel, Australia was Rs. 1,94,68,350. That showed that assessee had made substantial purchases from parties other than Total Tel for successful completion and commissioning of project undertaken by it in Sri Lanka. learned counsel argued that business of assessee of execution of foreign projects in Sri Lanka and Malawi comprised of contacting customer and to understand their need, create technical document to convert customer need into product; modify documents in consultation with customer to suit their requirement; freeze specs of product; submit commercial proposal and freeze order after negotiation. After having taken turnkey order and signed t h e agreement with customer; assessee placed orders on hardware supplier, viz., Compaq and Intel and on software supplier viz., Total Tel, IBM, etc. Thereafter items were dispatched at customer site and then followed execution of project by integration, commissioning and installation with customers network. No doubt Total Tel supplied significant technology but their role in whole thing was confined to selling their products only. learned counsel referred to correspondence between assessee and its clients by way of electronic mail from 15th Jan., 2001 to 5th Feb., 2001 at pp. 170 to 201 of paper book. He argued that these correspondence were produced just to illustrate that assessee was involved in logistic and nitty-gritty of installing and commissioning fully functional prepaid mobile telephony system on behalf of its customers abroad. learned Departmental Representative argued that within meaning of provisions of s. 182 of Contract Act, 1872 assessee was to be construed as agent of Total Tel, Australia on account of distribution agreement between assessee and Total Tel. He referred to judgment of Hon ble Supreme Court in 1959 (SC) 553 in support of this contention. learned Departmental Representative argued that entire activity of assessee in Sri Lanka and Malawi should be viewed keeping this in mind. That showed assessee was merely contacting himself as agent of Total Tel and it was matter of convenience amongst parties that contract was signed between assessee on one hand and Carrier and Telekom Malawi on other hand. It was to achieve this objective that Comfort Letter was furnished from Total Tel to foreign customers to Sri Lanka and Malawi. By virtue of this Comfort Letter while assessee was in front, Total Tel operated behind that cover. learned Departmental Representative referred to agreement between Total Tel and assessee at pp. 80 to 97 of paper book. He pointed out that in agreement assessee was described as VAR, i.e., Value Added Reseller. He referred to cl. 4 and pointed out that agreement resulted into grant of certain territory to assessee from Total Tel. learned Departmental Representative referred to letter of Total Tel dt. 22nd Jan., 1999 addressed to Carrier and pointed out that by this letter it was made clear that it was Total Tel prepaid system being installed in Sri Lanka as per contract between assessee and Carrier. learned Departmental Representative argued that assessee s relationship with Total Tel was required to be discern from facts of case, as held by Hon ble Allahabad High Court in their judgment in Loon Karan Sohan Lal vs. Firm John & Co. AIR 1967 All 308 agency was matter of true nature of relationship between parties. elaborate agreement between Total Tel and assessee had effect of appointing assessee as agent of Total Tel for distribution of products of Total Tel. learned Departmental Representative referred to purchase order of Carrier at p. 102 of paper book and pointed out that prepaid mobile software, including installation was dispatched directly from Melbourne, Australia to site of Carrier in Sri Lanka. learned Departmental Representative referred to assessee s invoices and pointed out that at p. 118 one of invoices stated that Total Tel International will take full responsibility for configuration of MTN Networks (P) Ltd., Sri Lanka. learned Departmental Representative argued that fact of matter that Estel had no locus standi of its own. assessee was there in agreement only because of its agreement dt. 20th June, 1998 with Total Tel and letter of Total Tel dt. 21st Jan., 1999 addressed to Carrier in Sri Lanka. entire business taken by assessee rested on these columns. On these facts it was not correct to say that assessee executed foreign project. assessee merely acted as authorized distributor of Total Tel. We have carefully considered rival submissions. In this case both learned AO and learned CIT(A) have rejected assessee s claim of deduction under s. 80HHB but they have done so on different counts. According to learned AO assessee was merely giving consultancy and maintenance of system till installation or providing licence. That in opinion of learned AO did not amount to actual execution of any project. He, therefore, held that assessee was not eligible to deduction under s. 80HHB. CIT(A) on other hand held that assessee was only marketing products of its principal, i.e., Total Tel and was also entering into agreements as authorized by principals. execution of agreement had been sub-contracted to assessee s principal only. Thus, assessee did not qualify for deduction under s. 80HHB because foreign project meant project for assembly or installation of any machinery or plant outside India while assessee-company was only marketing agent. case of assessee, on other hand, before us is that assessee had undertaken turnkey contract to provide its customers in Sri Lanka and Malawi not only sub-license to use software and sub-license to use support software, it also obtained for its customers hardware and third party software; installation and integration services; maintenance and support services; training services and marketing services. assessee was obliged to follow delivery schedule, technical specification and to ensure that installed system functions, satisfactorily. CIT(A) has held that assessee himself has not done these activities and he had in turn subcontracted same to Total Tel. Thus, assessee acted only as marketing agent and/or authorized distributor of Total Tel. difference in approach between learned AO and learned CIT(A) is that while according to learned AO assessee s agreements did not amount to execution of foreign project, according to CIT(A) while assessee entered into agreement for execution of foreign project, it did so in its capacity of being marketing agent of Total Tel and it was Total Tel who executed project. It would be pertinent at this stage to take stock of provisions of s. 80HHB. bare reading of sub-s. (1) revealed that while deduction under s. 80HHB is in respect of "foreign project", it is not necessary that execution o f entire foreign project should have been undertaken by assessee who claims deduction under s. 80HHB. Clause (b) of sub-s. (1) of s. 80HHB lays down that it would suffice if assessee, who is resident in India, derives any profits and gains from business of execution of any work undertaken by him and forming part of foreign project undertaken by any other person in pursuance of contract entered into by such other person. Thus, it is nowhere prescribed that whole of foreign project should be executed by assessee himself. case of assessee is on ker footing, inasmuch as, it is assessee who has entered into contract with its foreign customers and one else. Secondly, bare reading of sub-s. (1) of s. 80HHB suggests that while n assessee who claims deduction under s. 80HHB should derive profits and gains from business of execution of foreign project or execution of n y work forming part of foreign project, it is not stipulated that such assessee should, hence on, execute foreign project or work forming part of foreign project. In other words, assessee who sub-contracts execution of foreign project or execution of any work forming part of foreign project, would nonetheless be eligible for deduction under s. 80HHB in relation to profits and gains derived by him from business of such contract. During course of hearing before us, assessee has kly denied observations of both learned AO as well as learned CIT(A) and has maintained before us that assessee has entered into turnkey project executed by assessee himself. However, even if for arguments sake, observations of either AO or learned CIT(A) are not contested, it is difficult to see how assessee s case falls outside purview of provisions of s. 80HHB(1). Following is, according to AO himself, vivid description of assessee s activities in Sri Lanka and Malawi: "In case of assessee in question, contract agreements shows that obligations of assessee as mentioned in cl. 3 of agreements are that obligations of assessee as mentioned in cl. 3 of agreements are restricted to maintenance, consultancy for purchase of third party hardware/software and to sub-license prepaid software to Total Tel. assessee has to ensure that construction of proposed system are done in accordance with contract conditions, technical specification and any amendments thereto and they are accepted by Carrier. These agreements also show that limited obligation of company is to provide license to use prepaid software of Total Tel, to provide sub- license to use supported software, to obtain hardware and third party software as per specification of Carrier, to provide installation and integration services, timely shipment of components and to provide maintenance, training and marketing services to Carrier." From facts admitted by AO himself it is hard to see as to how it can be said that assessee merely provided peripheral services and did not execute any foreign project or any work forming part of foreign project. case made out by learned CIT(A) against assessee s claim of deduction is mainly based on letter dt. 22nd Jan., 1999 from Total Tel, Australia to Carrier, viz., MTN Networks (P) Ltd., Sri Lanka. She has reproduced extracts of letter at p. 8 of impugned order. At cost of repetition, following is communication dt. 22nd Jan., 1999: "Estel Telecom is authorized distributor of Total Tel International and other countries, including Sri Lanka. Total Tel and Estel have been working together to sell, implement and support prepaid system in these countries for many years. Estel is authorized by Total Tel to enter into sales and maintenance contract with Carriers in these countries for Total Tel s Prepaid Systems. For your project, Estel will sub-contract prepaid software customization, delivery, installation, commissioning including integration and acceptance back to Total Tel. Total Tel hereby confirm that we will supply software as per specification in attachment of your contact with Estel and install and integrate system in your network as per time tables specified in your contract with Estel. Estel is responsible for ensuring that hardware (which is not being brought by MTN directly) will reach site as per agreed dates. MTN should ensure that it arranges hardware being supplied by it to reach site by this date. Estel will also sub-contract maintenance and support of Total Tel prepared system installed in MTN to Total Tel. Total Tel will thus provide complete hardware and software support to our prepaid system installed at MTN in Sri Lanka as per contract between Estel and MTN, provided applicable fees are paid as contracted." According to learned CIT(A) this showed that assessee was only marketing agent and was not doing any assembly or installation of any machinery or plant outside by itself. flaw in reasoning of learned CIT(A) is that it is nowhere provided in s. 80HHB that assessee should execute foreign project undertaken by him in pursuance of contract entered into by him entirely on his own without sub-contracting any part of it to third party. learned CIT(A) has failed to see that it is assessee, who has undertaken execution of foreign project in question. It is assessee who has entered into contract to that effect with Carrier and Malawi. If any profits and gains are derived by assessee by virtue of such contract, it would be eligible to deduction under s. 80HHB even if assessee has got execution of foreign project done by engaging services of third party. fact of matter is that in instant case, assessee has entered into contract in its own right and not in any representative capacity. Surely, it is not case of Revenue that income in relation to which assessee has sought deduction did not accrue to assessee before us but it belongs to someone else. We find considerable emphasis in impugned order of learned CIT(A) that execution of foreign project was not done by assessee himself. However, on becoming aware that there was no bar to it being so in provisions of s. 80HHB, learned CIT(A) has further observed as under: "There is no doubt that requirement of section is not that company itself should do execution, but it can get work executed through its employees or through sub-contract, but in case of appellant-company facts are entirely different. In case of appellant-company, company is only distributor of its principal as noted above and also enters into agreement as authorized by Total Tel and all warranties are also provided by appellant-company on behalf of Total Tel as authorized by them. third party software and hardware also is purchased by appellant-company as agent of its customers, i.e., MTN Networks and Telecom Networks as noted above." In our opinion, fact that assessee had intimated commercial relationship with Total Tel and that came handy to assessee for successful performance of contract does not detract from fact that assessee entered into agreements with Carrier and Malawi on principal to principal basis and not as agent of Total Tel. letter of Total Tel dt. 22nd Jan., 1999 may have effect of underwriting assessee s contracts, but same does not have effect of substituting Total Tel in place of assessee in so far as agreements between parties are concerned. ground realties also do not appear to be different. It is difficult to conceive contractual receipts of assessee as mere commission earned by it on sale proceeds of Total Tel s products. learned counsel for assessee, while admitting before us that assessee was not original technology inventor or original equipment manufacturer, submitted that assessee purchased software from Total Tel on its own; support system from third party, hardware from Compaq, USA and Singapore; Dialogic Cards from Dialogic, USA and so on. learned counsel has also relied upon price differential and argued that such huge price differential could not be there without there being any value add from assessee. According to learned counsel business of assessee of execution of foreign projects in Sri Lanka and Malawi comprised of contracting customers, to understand their need, create technical documents to convert customer need into product; modify documents in consultation with customers to suit their requirement; freeze specs of products; submit commercial proposal and freeze order after negotiation and thereafter to sign agreement with customer. assessee then place, orders on hardware suppliers and software suppliers. These supplies were not restricted to Total Tel alone. items were dispatched at customers site and assessee participated in project of integration, commissioning and installation of its customers prepared cellular network. On consideration of arguments of parties and material on paper book filed by assessee and on perusal of agreements between parties, we are of view that it cannot be said that assessee did not enter into agreements in question on principal to principal basis, but as agent of Total Tel, Australia. agreements had been entered into by assessee at his own liabilities and risks. proceeds of project executed by assessee were appropriated by assessee and not shared with Total Tel. Total Tel was paid price of its products and services rendered but there is no evidence of profits sharing with Total Tel. assessee s business comprised of much more than mere delivery of hardware and software at customers site. We, therefore, hold that assessee s claim of deduction under s. 80HHB has been denied on untenable reason. We, therefore, reverse orders of authorities below and direct AO to grant assessee such deduction under s. 80HHB as may otherwise be admissible to assessee. In result, this appeal is allowed. *** ESTEL TELECOM (P) LTD. v. DEPUTY COMMISSIONER OF INCOME TAX