R.K. Gupta, J.M.: These are two appeals by Department against order of CIT(A) relating to asst. yrs. 1998-99 and 1997-98. Since issue is common in both appeals, therefore, for sake of convenience same are disposed of by this single order. In both appeals, Department is objecting in directing AO to exclude from total income amount of Rs. 38,11,615 in respect of Koregaon unit being 100 per cent export-oriented unit holding same to be entitled to exemption under s. 10B as unit fulfilled all conditions as per sub-s. (2) of s. 10B without appreciating that apart from fulfilment of basic conditions in sub-s. (2), working out of correct profits and gains is essential for several other purposes under aforesaid provision. Thereafter, Department, through its ground Nos. 2 and 3 has further raised objections, which are in nature of arguments. Briefly stated facts of case are that assessee company carried on t h e same business as in earlier years, which pertains to processing and exporting meat and seafood items. assessee has got its units located at Koregaon. Taloja and New Delhi. AO has observed that assessee claimed deduction under s. 10B in respect of Koregaon unit for these two years. AO further noticed that assessee company does not maintain separate books of accounts for this unit. claim under s. 10B has been worked out on basis of proportionate turnover of Koregaon unit. To examine this issue of allowability of deduction, AO required assessee to file details and explanation that how deduction claimed by it without maintaining separate books of accounts are allowable. Detailed explanation was filed. certificate from appropriate authority that said unit is 100 per cent export-oriented unit was filed. After examining details, AO noticed that no separate books of accounts have been maintained by assessee company. AO was of view that without maintaining separate books of account, it is not possible to arrive at correct profit/loss of s. 10B unit which cannot be subjected to either taxation or carry forward of loss in case result is loss. In view of above observation, AO rejected claim of assessee for asst. yr. 1997-98 as well as for asst. yr. 1998-99. assessee preferred appeal before CIT(A) before whom detailed submissions were filed and it was submitted that assessee company was engaged in business of processing and exporting meat. Practically 100 per cent of sales of assessee company are export sales. assessee company has three units one at Koregaon and others at Taloja and New Delhi. unit at Koregaon is 100 per cent export-oriented undertaking within meaning of provisions of s. 10B of Act. Copy of certificate issued by t h e Secretariat for Industrial Approvals, Department of Industrial Policy and Promotion, Ministry of Industry, Government of India was also filed. It was further submitted that assessee has claimed relief under s. 10B in respect of income of Koregaon unit as all conditions mentioned in s. 10B(2) are fulfilled by Koregaon unit. It was further submitted that AO has not brought on record any additional ground for not allowing benefit of exemption under s. 10B in respect of income of Koregaon unit for assessment year under consideration except mentioning that assessee has not maintained any separate books of account. It was further submitted that detailed submissions and reasons given before AO have not been considered by AO in right perspective. Accordingly, it was requested to allow relief under s. 10B, since it is not requirement of law to maintain separate books of accounts. It was also submitted that working of profit for purpose of deduction under s. 10B has not been disputed by AO. After considering submissions and perusing relevant material on record, learned CIT(A) came to conclusion that assessee is entitled for deduction under s. 10B. Accordingly, he allowed deduction to assessee for both years. Now Department is in appeal here before us against order of CIT(A) for both years. learned Departmental Representative placed reliance on order of AO and, on other hand, learned counsel of assessee placed reliance on order of CIT(A). It was further submitted that all conditions f o r claiming s. 10B are satisfied. Attention of Bench was drawn on provisions of law. We have heard rival submissions and considered them carefully. After considering submissions and perusing material on record, we do not find any infirmity in findings of CIT(A). findings of CIT(A) in appeal for asst. yr. 1998-99 are recorded in paras 2.2 to 2.4 at pp. 3 to 5 which are as under: From perusal of permission letter dt. 26th June, 1996 issued by Government of India, Ministry of Industry, Department of Industrial Policy and Promotion, Secretariat for Industrial Approvals, EOU Section under subject "your 100 per cent export-oriented application for permission under 100 per cent export-oriented scheme for manufacture of Buffalo Meat", it has been mentioned that with reference to abovementioned application registered under SIA No. EOB, 875/95, dt. 27th Dec., 1995, Government is pleased to extend to you all facilities and privileges admissible under 100 per cent export-oriented scheme for conversion of existing DIA unit into 100 per cent EOU at MAFCO complex, Subhash Nagar, Koregaon, Satara in State of Maharashtra for manufacture of following items upto capacities maximum utilization of plant and machinery. above permission is subject to conditions stipulated in annexure in addition to following conditions: (i) entire (100 per cent) production shall be exported to general currency area countries/hard currency area countries. (ii) You shall undertake to export entire production (100 per cent) excluding rejects not exceeding 5 per cent for period of 10 years. For this purpose, you will furnish requisite legal agreement/bank guarantee. After export obligation period is over, unit shall be allowed to produce for domestic market in light of industrial policy in force at time in relation to manufacture of items reserved for small scale sector and sectoral policy prevailing at that point of time so on and so forth. green card No. 317, dt. 2nd July, 1996 for 100 per cent export-oriented unit has also been issued where it has been mentioned that "M/s Arabian Exports Ltd., has been approved under special scheme of Government of India as 100 per cent export-oriented unit. unit is entitled to top priority treatment from all concerned Central and State Government departments and other organizations in all matters relating to project." Sec. 10B of Act relates with special provisions in respect of newly established 100 per cent export-oriented undertakings. Sec. 10B reads as under: "Subject to provisions of this section, any profits and gains derived by assessee from hundred per cent export-oriented undertaking (hereinafter in this section referred to as undertaking) to which this section applies shall not be included in total income of assessee. Sub-s. (2). This section applied to any undertaking which fulfils all following conditions, namely; (i) it manufactures or produces any article or thing, (ia) in relation to undertaking which begins to manufacture or produce any article or thing on or after 1st day of April, 1994, its exports of such articles and things are not less than seventy five per cent of total sales thereof during previous year. (ii) it is not formed by splitting up or reconstruction of business already in existence: Provided that this condition shall not apply in respect of any undertaking which is formed as result of re-establishment, reconstruction or revival by assessee of business of any such industrial undertaking as is referred to in s. 33B, in circumstances and within period specified in that section; (i) it is not formed by transfer to new business of machinery or plant previously used for any purpose. In view of above provisions of s. 10B, any profits and gains which are derived by assessee from 100 per cent export-oriented undertaking shall not be included in total income of assessee, if conditions in sub-s. (2) of this section are fulfilled. Looking to these conditions as mentioned in sub-s. (2) of this section, it is not seen that separate books of accounts are requirement of claiming deduction from total income of any assessee relating to profits and gains derived by that assessee from 100 per cent export-oriented undertaking. In view of this, it is now very much clear that AO is not justified in including amount of Rs. 38,11,615 in export turnover for purpose of working out deduction under s. 80HHC of Act. As per provisions of s. 80HHC(4B), inserted by Finance Act, 1999 with retrospective effect from 1st April, 1992, any income not charged to tax under this Act shall be excluded for purposes of computing total income under sub-s. (1) or sub-s. (1A) of s. 80HHC. Therefore, AO is directed to exclude form total income of appellant amount of Rs. 38,11,615 in respect of Koregaon unit which has been worked out by appellant being 100 per cent export-oriented unit of appellant. This Koregaon unit is fulfilling all conditions as per sub-s. (2) of s. 10B of Act and therefore, it is entitled for that exemption. This ground of appeals is allowed." Neither findings of CIT(A) could be controverted by learned Departmental Representative nor any other material was brought on record to establish otherwise. Therefore, we see no reason to interfere with findings of CIT(A). We have also taken into consideration various decisions on which reliance was placed by Authorised Representative. These decisions are Punjab Tractors Ltd. vs. Dy. CIT (2004) 89 TTJ (Chd) 439, CIT vs. Hindustan Malleables & Forgings Ltd. (1991) 191 ITR 70 (Pat), CIT vs. Sree Krishna Pulversing Mills (2000) 163 CTR (AP) 151: (2000) 241 ITR 262 (AP) and Mahindra Sintered Products Ltd. vs. CIT (1989) 75 CTR (Bom) 83: (1989) 177 ITR 111 (Bom) and found that though these decisions are not in respect of deduction under s. 10B, but they are in respect of deduction claimed under s. 80- I. However, in these cases also it was held that it is not necessary to maintain separate books of accounts but what is necessary is that necessary conditions for claiming deduction have to be satisfied. In present case, there is no dispute that assessee has fulfilled all conditions. We therefore are of dispute that assessee has fulfilled all conditions. We therefore are of considered view that AO was not justified in denying claim of assessee on account that no separate books of accounts have been maintained by assessee but CIT(A) was justified in allowing claim of assessee. Therefore, in view of above facts and circumstances, and in view of reasoning given by CIT(A), we confirm his order for both years. In result, appeals filed by Department are dismissed. *** DEPUTY COMMISSIONER OF INCOME TAX v. ARABIAN EXPORTS LTD.