120 ITD 567 D.R. Singh, Judicial Member.: These two appeals one filed by assessee and other filed by revenue arose out of order of ld. CIT(A) passed in Appeal No. 238/03- 04/CIT(A)-XIV/Delhi, dated 31-3-2005. 2. assessee in its Appeal No. 2661/Delhi/2005 took following grounds: "(1) That learned CIT(A)-XIV has erred on facts and in law in upholding order of Assessing Officer that entire losses (including unabsorbed depreciation) pertaining to assessment year 1998-99 cannot be carried forward and set off against profits of subsequent years though same not only carried forward but has also been set off in assessment year 2000-01. findings of ld. CIT(A) are in excess of jurisdiction and otherwise too are unsustainable both on facts and in law. (2) That ld. CIT(A) has erred in upholding action of Assessing Officer in adjudicating in instant assessment year, upon carry forward of losses (including unabsorbed depreciation) pertaining to assessment year 1998- 99, where set off of such losses had already been adjudicated and duly allowed by Assessing Officer himself in assessment order for assessment year 2000-01, and thereby sitting over judgment of his predecessor. (3) That ld. CIT(A) has erred in holding that proportion of losses (including unabsorbed depreciation) of assessment year 1998-99 pertaining to Electronic Payment System business cannot be carried forward for set off against taxable income of subsequent years. (4) That ld. CIT(A) has erred on facts in holding without any basis, that substantial portion of losses (including unabsorbed depreciation) pertaining to assessment year 1998-99 was on account of software development business of appellant. (5) That ld. CIT(A) has erred in holding that proportion of losses (including unabsorbed depreciation) of assessment year 1998-99 pertaining to software development business of appellant cannot be carried forward and s e t off against profits of subsequent years since appellant has claimed deduction under section 10A of Income-tax Act, 1961 from income arising from software development business in subsequent years. (6) That ld. CIT(A) has erred in upholding findings of Assessing Officer that interest income received by appellant from housing loans advanced to its employees, fails under head "Income from other sources" and is not eligible for deduction under section 10A of Act." 3. In its Appeal No. 2696/D/2005, revenue has taken following effective ground: "On facts and in circumstances of case and in law, CIT(A) h s erred in deleting addition made by Assessing Officer by way of disallowance of exemption of income claimed under section 10A of Income-tax Act, 1961 in respect of SSC Unit, Gurgaon by assessee." 4. Firstly, we shall deal with issue, whether entire losses including unabsorbed depreciation pertaining to assessment year 1998-99 could be allowed to be carried forward and set off against profits of subsequent years, involved in Ground Nos. 1 to 5 of appeal of assessee. 5. Briefly stated facts are that assessee company is in business of providing technology based solutions to eFunds group entities and third party customers mainly outside India. These services are rendered through three units registered under Software Technology Parks of India (STPI) scheme, formulated by Government of India, viz. Software Development Centre (hereinafter referred t o as SDC ) in Chennai, Shared Services Centre (hereinafter referred to as SSC ) in Gurgaon and Call Centre in Mumbai. During subject assessment year, assessee had filed its return of income declaring income amounting to Rs. 32,74,42,418 (Refer Pages 1-30 of paper book). entire income of Rs. 32,74,42,418 was claimed as deduction by assessee under section 10A of Income-tax Act, 1961 ( Act ). Further, assessee also derived interest income of Rs. 2,53,166 during assessment year and its tax liability on same amounted to Rs. 1,00,129. 6. In assessment year 1998-99, Assessing Officer has observed that assessee had claimed business loss of Rs. 4,35,46,015 and unabsorbed depreciation of Rs. 8,69,435. losses pertain to two activities of assessee i.e., Electronic Payment Service (EPS) and Software Development Centre (SDC) at Chennai, 10A exemption has been claimed in subsequent year in respect of SDC at Chennai, therefore, losses of SDC at Chennai cannot be adjusted against profits of non-STP units. Assessing Officer also observed that assessee-company has not been able to clearly quantify exact amount of losses pertaining to said 10A Unit at Chennai, therefore, he showed his inability to give credit/adjustment of losses brought forward for assessment year 1998-99 and held that losses primarily pertains to 10A units and as losses of Rs. 6,11,36,064 had already been adjusted in assessment year 2000- 01, no credit of brought forward losses could be allowed to assessee. 7. Aggrieved with order of Assessing Officer, assessee filed appeal before CIT(A) and submitted that company was incorporated on 14-7-1997. During assessment year 1998-99 appellant was primarily engaged in EPS business. Towards February 1998, appellant set up SDC unit in Chennai. Though initial registration of SDC in STP was obtained o n 9-2-1998 SDC commenced manufacture or production of computer software in April 1998 only relevant to assessment year 1999-2000. CIT(A) for assessment year 1998-99 allowed carried forward business loss of Rs. 3,22,20,205 (excluding pre-incorporation expenses of Rs. 1,13,25,910) and unabsorbed depreciation of Rs. 8,69,435 to be set off against profits of subsequent years. appellant discontinued its EPS business during financial year 1998-99 i.e., relevant to assessment year 1999-2000. appellant filed its return of income for assessment year 1999-2000 returning business loss of Rs. 5,24,99,307 and unabsorbed depreciation of Rs. 80,45,116. No assessment was undertaken under section 143(3) of Act for said year. returned loss pertained to loss in both EPS business and SSC unit. For assessment year 2000-01 Assessing Officer determined income under normal provisions of Act at Rs. 6,11,36,064 and set off same against losses brought of Act at Rs. 6,11,36,064 and set off same against losses brought forward from prior year. Assessing Officer erred in law in adjudicating upon set off of business losses pertaining to assessment year 1998-99, in subject year i.e., assessment year 2001-02 since set off of such losses has already been allowed by ld. Assessing Officer during assessment proceedings of assessment year 2000-01 vide his order under section 143(3) of Act. Further, section 72(1)(i) of Act has been amended vide Finance Act, 1999 with effect from 1-4-2000, whereby requirement of continuing business (in which loss had been incurred) in assessment year in which loss is to be set off, has been deleted and hence, is not applicable from assessment year 2000-01. Once unabsorbed loss of Rs. 3,22,20,205 pertaining to assessment year 1998-99 has already been adjusted by ld. Assessing Officer against profits of assessment year 2000-01 in terms of law applicable to that assessment year, he is debarred from re-examining availability of same in assessment year 2001-02; since no portion of unabsorbed loss for assessment year 1998-99 is available for being set off in assessment year 2001- 02 and only brought forward loss for assessment year 1999-2000 can be set off against assessed income. EPS line of business was discontinued and it was decided not to make any further investments therein during financial year 1989-90, it took another 4-6 months to complete entire process of closing down business in terms of employees resigning from services and disposal of premises and assets of business. EPS business was discontinued in financial year 1999-2000 but it was eligible to carry forward losses of assessment year 1999-2000 pertaining to EPS. It has been held by various High Courts that eligibility for set off of losses pertaining to prior assessment year is to be determined by Assessing Officer undertaking assessment of assessment year in which such losses are to be set off since law applicable for set off of losses is law as applicable to assessment year in which losses are being set off. Reliance was placed on case of Reliance Jute & Industries Ltd. v. CIT [1979] 120 ITR 921 (SC). Accordingly, appellant was not eligible to set off losses of assessment year 1998-99 against assessment year 2000-01 and Assessing Officer was entitled to adjudicate upon eligibility towards set off of brought forward losses pertaining to assessment year 1998-99. Assessing Officer has wrongly concluded losses of assessment year 1998-99 pertains to SDC business and choose to ignore same. As already mentioned in assessment year 1998-99 appellant was engaged in EPS business and SDC unit was registered only on 9-2-1998. Therefore, entire business loss and unabsorbed depreciation for assessment year 1998-99 pertains mainly to EPS business of appellant. bifurcation of losses of EPS business and SDC unit set up in February, 1998 is given. 8. After considering submission, learned CIT(A) confirmed order of Assessing Officer by making following relevant observations in his order: "In case of assessee it is submitted by assessee itself that EPS business was discontinued in financial year 1998-99 pertaining to assessment year 1999-2000, therefore, as per provisions of Act losses of discontinued business could not have been carried forward as per provisions then existing. para reproduced by appellant from Sampath Iyengar as noted above also does not help appellant because it relates to carry forward and adjustment of losses of business discontinued during year itself between various heads of income even if business is continued only for short period. In case of appellant it is not adjustment o f discontinued business in assessment year 1999-2000 with other income but question is whether losses of discontinued business in 1999- 2000 can be carried forward or not. provisions of section 72 relate to carry forward and set off of business losses. When business is discontinued during year there is no question of carried forward of its business losses to subsequent years. When there is no carried forward to subsequent years question of set off also does not arise. Therefore, amendment in section with effect from 1-4-2000 does not help appellant that carried forward losses can be adjusted of discontinued business also. Only if business has been discontinued in financial year 1999-2000 relevant to assessment year 2000-01 position would have been as argued by appellant counsel. Therefore, losses of EPS business of assessment year 1998-99 would in any case are not available to appellant for adjustment in assessment year 2000-01 as they could not have been carried forward in assessment year 1999- 2000 on ground that EPS business was discontinued. Therefore, losses of assessment year 1998-99 in any case whether of EPS business or SDC business were not available of readjustment in assessment year 2000-01 on ground that EPS business was discontinued in assessment year 1999- 2000 and income of SDC units was claimed exempt subsequently under section 10A of Income-tax Act besides there being no quantification of losses of two units. Therefore, Assessing Officer in assessment year 2001-02 rightly examined issue of carried forward losses and rightly held that no carried forward losses are available in assessment year 2001-02 for adjustment. action of Assessing Officer is confirmed." 9. We have considered rival submissions of both parties, perused records and carefully gone through orders of tax authorities below. In this case undisputed facts are that in assessment year 1998-99 business loss of SDC Unit aggregated to Rs. 67,42,507 as per profit and loss account and business loss of EPS Unit aggregated to Rs. 3,76,73,040 and after order of CIT(A) it had been held to be at Rs. 2,55,32,652 (including depreciation of Rs. 2,63,47,131). order of CIT(A) had been upheld by Tribunal in ITA No. 2498/Delhi/2002, assessment year 1998-99 dated 1-12-2004, which was further confirmed by Hon ble Delhi High Court vide order dated 12-9-2006 in ITA No. 680 of 2005 (copy of order have been placed at pages 199 - 204 and at pages 205 - 209 respectively of paper book). In order passed for assessment year 1998-99 Assessing Officer had not held that loss of Rs. 3,76,73,040 was not business loss of EPS Unit but was loss of SDC and CIT(A) too, without any specific material on record, held that this determined business loss in assessment year 1998-99 cannot be set off in assessment year 2001-02 under consideration and remaining unabsorbed business loss could not be allowed to be carried forward, more so, when determined loss for assessment year 1999-2000 had already been allowed to be set off to extent of profit of that year in assessment year 2000-01. It is also important to mention here that section 72(1) of Income-tax Act from assessment year 2000- 01 (i.e., after amendment had been made), statutory provision, clearly lays down that assessee is entitled to carry forward its business loss to subsequent year and further requirement, that business in which loss had been suffered must also be continued to be carried on, has been deleted by Finance Act, 1999 with effect from 1-4-2000. Undisputedly in instant case E P S business was conducted till assessment year 1999-2000 and as such, when business was continued to be carried on for year 1999-2000, loss remaining unabsorbed had to be carried forward and set off in assessment year 2000-01 and thereafter. In fact, in instant case in assessment year 2000-01, Assessing Officer had himself set off loss and it is only unabsorbed determined business loss and unabsorbed depreciation which is being claimed to be set off in year under consideration and what remains to be set off is claimed to be carried forward by assessee. Hence, for reasons stated above we are of opinion that tax authorities below were not justified in not allowing impugned unabsorbed business loss and unabsorbed depreciation to extent of profits to be set off in assessment year 2001-02 under consideration and, therefore, orders of tax authorities below in this regard are required to be set aside and accordingly same are set asides. issue involved in ground Nos. 1-5 of appeal of assessee is decided in favour of assessee and against revenue. Consequently, ground Nos. 1-5 of assessee s appeal are allowed. 10. Now, we shall deal with issue involved in ground No. 6 of appeal of assessee relating to eligibility of deduction under section 10A of Act in respect of interest received by assessee from housing loans. 11. Briefly stated, facts relating to this issue are that assessee received interest income from housing loan advanced to its employees and claimed deduction under section 10A of Act but according to Assessing Officer interest income earned by assessee from loan advanced to its employees has got nothing to do with export of computer software and so he assessed same under head Other sources by placing reliance on various decisions and declined deduction on amount claimed by assessee under section 10A of Act. 12. Aggrieved with order of Assessing Officer, assessee filed appeal before CIT(A) and submitted before him that combined reading of sub-section (1) and sub-section (4) of section 10A of Act would make it clear that profit derived from export of computer software as per sub-section (1) is essentially derivative of profit of business of undertaking as per sub- section (4). Accordingly, section assumes that part of profits of business of undertaking as profit derived from export of computer software as is proportionate to export turnover vis-a-vis total turnover of undertaking. Reliance in this regard was placed on following: (1)Asstt. CIT v. Sharda Gums & Chemicals Industrial Area [2000] 76 ITD 282 (Jodh. Tribunal); (2)Shiva Shankar Granites (P.) Ltd. v. ITO [2002] 81 ITD 106 (Hyd. Tribunal). 13. appellant had given housing loan to its employees at concessional rate of interest with view to provide perquisite/incentive to its employees. Hence such loan had been advanced by appellant in course of its business, with view to keep employees motivated to perform well. Hence interest income arising to appellant from same was directly linked to business of appellant. Accordingly, such income is in nature of profits or gains from business or profession and should not be taxed as income from other sources. Further, reliance in this regard has been placed on following judgments: (1)Infotech Enterprises Ltd. v. Jt. CIT [2003] 85 ITD 325 (ITAT Hyd.); (2)CIT v. Paramount Premises (P.) Ltd. [1991] 190 ITR 259 (Bom.); (3)CIT v. Tirupati Woollen Mills Ltd. [1992] 193 ITR 252 (Cal.); (4)CIT v. Madras Refineries Ltd. [1997] 228 ITR 354 (Mad.). 14. On considering submissions and rejecting same, CIT(A) upheld order of Assessing Officer by making following observations in his order: "As far as contention of appellant is concerned that taking into consideration provisions of section 10A(1) of Act, it is clear that profits of business is to be considered and, therefore, interest income is also to be considered is incorrect. There is no doubt that deduction is to be allowed in respect of profits of business but interest earned by appellant on loans advanced to its employees is not profits of business and is required to be assessed under head Other sources . Therefore, as interest earned by appellant from loans advanced to its employees does not fall under head Profits and gains of business , Assessing Officer has rightly excluded same while giving deduction under section 10A of Act and has rightly assessed same under head Income from other sources . facts in various decisions quoted by appellant are different and also after Apex Court judgment in case of Tuticorin Alkali Chemicals & Fertilizers v. CIT 227 ITR 172, there is no doubt that various kinds of income earned by assessee are required to be taxed under various heads and mere fact that assessee carrying on business does not lead to inference that all income is to be assessed under head Business income ." 15. Before us learned AR for assessee in written submissions and in t h e oral arguments reiterating submissions made before CIT(A) contended that tax authorities below have erred in interpreting provisions of section 10A of Act as mode of computation of deduction has been provided in sub-section (4) of section 10A of Act and same should be followed strictly in arriving at deduction to be allowed under sub-section (1) of section 10A of Act. phrase profits of undertaking is wider than scope of phrase profits derived from export of computer software . In instant case phrase profits of business of undertaking is wider than scope of phrase profits derived from export of computer software . In instant case, housing loan advanced by assessee to its employees at concessional rate of interest is perquisite provided to employees in course of assessee s business since same has been undertaken with view to provide incentive to employees and hence, is essentially and inextricably linked to business of assessee. Accordingly, interest income arising on such housing loans clearly falls within ambit of phrase profits of business of undertaking and hence, is eligible for deduction under section 10A of Act computed under sub-section (4). Reference is invited to decision of Jodhpur Tribunal in case of Sharda Gums & Chemicals Industrial Area (supra). 16. On other hand learned DR for revenue placing k reliance on reasoning given in orders of tax authorities below contended that interest on loans given to employees by assessee has no nexus between activity of assessee undertaking, hence, income by way of interest on such loans cannot be termed as income from profits of business of undertaking as provided in sub-section (4) of section 10A of Income-tax Act and, therefore, tax authorities below were fully justified in concluding that income earned by assessee from housing loans to its employees does not amount to profits of business as same has not been derived from export of computer software and so tax authorities below have rightly declined deduction claimed by assessee on interest income under section 10A of Act. 17. We have considered rival submissions of both parties, perused records and carefully gone through orders of tax authorities below. 18. Before dealing with issue under consideration, we would like to refer to relevant provisions of section 10A of Act and same are reproduced herein under: "Section 10A(1) Subject to provisions of this section, deduction of such profits and gains as are derived by undertaking from export of articles or things or computer software for period of ten consecutive assessment years beginning with assessment year relevant to previous year in which undertaking begins to manufacture or produce such articles or things or computer software, as case may be, shall be allowed from total income of assessee: Provided that where in computing total income of undertaking for any assessment year, its profits and gains had not been included by application of provisions of this section as it stood immediately before its substitution by Finance Act, 2000, undertaking shall be entitled to deduction referred to in this sub-section only for unexpired period of aforesaid ten consecutive assessment years: Provided further that whereas undertaking initially located in any free trade zone or export processing zone is subsequently located in special economic zone by reason of conversion of such free trade zone or export processing zone into special economic zone, period of ten consecutive assessment years referred to in this sub-section shall be reckoned from assessment year relevant to previous year in which [undertaking began to manufacture or produce such articles or things or computer software] in such free trade zone or export processing zone: [Provided also that for assessment year beginning on 1-4-2003, deduction under this sub-section shall be ninety per cent of profits or gains derived by undertaking from export of such articles or things or computer software:] Provided also that no deduction under this section shall be allowed to any undertaking for assessment year beginning on 1-4-2010 and subsequent years. Section 10A(4) [(4) For purposes of [sub-sections (1) and (1A)] profits derived from export of articles or things or computer software shall be amount which bears to profits of business of undertaking, same proportion as export turnover in respect of such articles or things or computer software bears to total turnover of business carried on by undertaking.]" 19. For computation of profits derived from export of articles or things or computer software were sub-section (4) provides that profits derived from such exports shall be amount which bears to profits of business, same proportion as export turnover in respect of such articles or things or computer software bears to total turnover of business, profits of business in given context would mean profits of business carried on by undertaking to which provisions apply. working formula for arriving at export profits will be as under: "For computation of profits derived from export of articles or things or computer software, sub-section (4) provides that profits derived from such exports shall be amount which bears to profits of business, same proportion as export turnover in respect of such articles or things or computer software bears to total turnover of business. profits of business in given context would mean profits of business carried on by undertaking to which provisions apply. working formula for arriving at export profits will be as under: Project of undertaking Export Turnover Total Turnover above-mentioned formula makes it clear that profits derived from export of computer software is essentially derivative of profits of business of undertaking ." 20. Accordingly, profits of business in given context would mean profits of business carried on by undertaking to which provisions apply. It means that in this background we are required to decide whether interest income earned by assessee from housing loans advanced to its employees would also form part of profits from business carried on by undertaking for allowing deduction under section 10A of Act. Undisputedly, assessee undertaking is in business of providing technology based solution to efund groups entities and third party customers mainly outside India and these services are rendered through three units registered under Software Technology Parks of India ( STPI ) scheme. Hence, interest income earned by assessee on housing loans given to its employees would certainly not form part of profits of assessee undertaking as there is no nexus between activity carried on by assessee and income earned by way of interest on housing loans advanced to its employees. In view of discussion hereinabove assessee is not eligible to claim deduction under section 10A of Act on income earned from interest on housing loan advanced to its employees. decision of ITAT (Jodhpur Bench) in case of Sharda Gums & Chemicals Industrial Area (supra) relied upon by learned AR for assessee does not apply to facts and issue under consideration first because case law relates to deduction claimed under section 80HHC of Act on interest earned by assessee on FDRs whereas in instant case we are concerned with deduction claimed under section 10A of Act in respect of interest earned by assessee on housing loans advanced to employees; second because in sub-section (3) of section 80HHC of Act while computing profits in working formula for arriving at export profits words used are "profits of business", whereas, while working out same for deduction under section 10A in sub-section (4) of Act, words used are profits of undertaking . provisions of section 10A and section 80HHC of Act cannot, therefore, be held to be at par. Hence, case law (supra) relied upon by learned AR for assessee is of no assistance to assessee for resolving issue under consideration. 21. For reasons stated above, we hold that interest income earned b y assessee from housing loans advanced to its employees does not form part of profits of business of assessee undertakings hence, same is not eligible for deduction under section 10A of Act and, therefore, orders of tax authorities below, in this regard, are upheld and ground No. 6 of appeal of assessee is rejected. 22. Now, we shall deal with ground of appeal taken by revenue. 23. Briefly stated facts relating to issue are that Assessing Officer noted in order passed in assessment year 2000-01 that assessee-company had claimed deduction under section 80HHE of Act in respect of SSC Gurgaon unit whereas in assessment year 2001-02, it is claiming deduction under section 10A of Act for very first time. It was explained by assessee during course of assessment proceedings that no deduction was available under section 10A of Act till assessment year 2000-01 as no tax holiday was available with respect to income of SSC unit as its activities did not fall within purview of prescribed services and only after amendment of section 10A of Act with effect from 2001-02 scope of activities of assessee unit is eligible for tax holiday. Assessing Officer observed once deduction is claimed under section 80HHE of Act as per provisions of section 80HHE(5) of Act, no deduction under any other provision of Act can be claimed and, therefore, no deduction under section 10A is allowable in assessment year 2001-02. It has been further observed that principal object of provisions of section 10A of Act is to encourage setting up of new industrial undertaking and in instant case, it will get defeated as no new industrial undertaking had been set up, appellant company has also not claimed deduction when unit started its manufacturing from assessment year 1999-2000. It was further observed that as per section 10A(2)(ii) of Act, no deduction is allowable if assessee- company is already in existence. notification of CBDT dated 26-9-2000 in reference to definition of computer software with effect from 1-4-2001 was to encourage setting up of new industrial undertakings and not with intention to provide incentive to existing units. By observing this, Assessing Officer disallowed claim of appellant of Rs. 17,16,18,562. 24. In appeal, CIT(A) after considering various detailed submissions of assessee as detailed in order of CIT(A) as well as relevant provision of section 80HHE, section 10A(2) of Act held that assessee was entitled to claim deduction under section 10A of Act by making following observations in his order: "On going through sub-section (2) of section 10A of Act, it is observed that only conditions given in sub-section were required to be specified. case of assessee-company is falling under sub-section (2)(i) and not (ii) as held by Assessing Officer. SSC unit of assessee-company has not been formed by splitting up or reconstruction of business already in existence but SSC unit was in existence and is being assessed from assessment year 1999-2000 itself. It is only that at that time, SSC unit could not claim exemption under section 10A because it was not eligible to claim deduction and only after amendment of definition of computer deduction and only after amendment of definition of computer software with effect from 1-4-2001 SSC unit became eligible to claim deduction under section 10A of Act. 2.3-3 argument of Assessing Officer that exemption has to be claimed from initial year of start of manufacture or produce articles or things or computer software itself as per section 10A(1) is again misplaced. In fact, when section was amended by Finance Act, 1986 as per sub-section (3) of section 10A of Act, exemption was allowable only for any five consecutive assessment years falling within period of eight years beginning with assessment year relevant to previous year in which undertaking begins to manufacture or produce articles or things specified by assessee at this option. It is clear from above sub-section, it was not must that exemption is required to be claimed from first year of undertaking beginning to manufacture or produce article or things but it was at option of assessee in which years it wanted to claim exemption only condition being that it would be within eight years of starting of manufacture or produce article or thing by industrial undertaking and once claimed should be claimed consecutively for five years. 2.3-4 If for moment argument of Assessing Officer is considered, then if in case which satisfies all conditions required to be fulfilled under section 10A and it did not claim exemption under section 10A, let us say for two years, due to any reason and in third year if it wants to claim exemption and it is satisfying all conditions laid down under section 10A, exemption cannot be claimed? No, it cannot be so, exemption has to be allowed and only condition prescribed is that as it is available only for ten years from year in which industrial undertaking qualifies and, thus, it will be available only for eight years to concerned industrial undertaking. 2.3-5 relevant portion of Hon ble ITAT Delhi decision in case of Legato Systems India (P.) Ltd. ITA Nos. 526 & 527/Delhi/2004 for assessment year 2001-02 dated 30-11-2004 is noted below: .......... 19. Upon harmonious reading of entire provision, our considered view, therefore, is that expression such profits as appearing in section (5) refers to section does not place restriction to shift for claim of deduction or exemption under any other provision in respect of profits for which no deduction has been claimed and allowed in previous year. Since both sections i.e., section 80HHE and section 10A entitle benefit, law which enables larger benefit being earned by him. Thus funds support from decision of Supreme Court in Collector of Central Excise v. Indian Petro Chemicals [1997] 11 SCC 318 and also by Hon ble High Court of judicature at Delhi in case of C.S. Mathur v. CBDT 235 ITR 769 (Delhi). We, therefore, do not find any justification in action of learned Commissioner of Income- tax (Appeals) to uphold that assessee being old unit and once having claimed deduction under section 80HHE was not entitle to claim exemption under section 10A from profits of its unit. However, Assessing Officer in assessment order has not dealt with submissions made by appellant that it carried out all requisites envisaged in scheme of section 10A before denying exemption. We, therefore, set-aside orders of authorities below on this point and restore matter back to file of Assessing Officer with direction to allow exemption under section 10A in both years in case assessee is found to have satisfied all other requisites envisaged in scheme of section 10A of Act. In case exemption under section 10A cannot be allowed for reasons of not satisfying requisites, claim of deduction under section 80HHE shall be allowed after providing opportunity to meet requisites. .... In view of above discussion, as appellant satisfies all conditions prescribed in section 10A of Act, Assessing Officer has wrongly not allowed claim and is directed to allow same." 25. Before us ld. DR for revenue except placing reliance on reasoning given in order of Assessing Officer was neither able to controvert factual observations recorded in order of CIT(A) nor was able to cite any case law wherein view contrary to view taken in case law relied upon by CIT(A) has been taken. 26. On other hand ld. AR for assessee reiterating submissions made before tax authorities below submitted that assessee company when set up its business was not eligible to claim deduction under section 1 0 but when definition to claim deduction in respect of computer software was amended it became eligible to claim deduction in assessment year under consideration, hence, assessee has rightly claimed deduction under section 10A and same has been rightly allowed by CIT(A). In support of contention ld. AR for assessee placed reliance on decision of ITAT Delhi Bench in case of Legato Systems India (P.) Ltd. v. ITO [2005] 2 SOT 719, which has subsequently been confirmed by Hon ble Delhi High Court in its decision dated 12-7-2005 in CIT v. Legato Systems India (P.) Ltd. [2006] 203 CTR(Delhi) 101. Ld. AR for assessee further relied upon consolidated order in unreported decision of ITAT Chennai Bench in case of Covansys (I) (P.) Ltd. v. Dy. CIT [IT Appeal No. 62 (Mad.) of 2003 A.Y. 1998-99 and ITA No. 2246 (Mad.) of 2005 A.Y. 2001-02, dated 20-7-2007] and on two other decision of ITAT Delhi Bench, in case of Dy. CIT v. Interra Software (I) (P.) Ltd. [2008] 168 TAXMAN 80 (Mag.) and in case of Mentor Graphics (Noida) (P.) Ltd. v. Dy. CIT [IT Appeal No. 1968 (Delhi) of 2006, A.Y. 2000-01, dated 11-9-2006] and on decision in case of Techbook Electronics Services (P.) Ltd. v. Asstt. CIT 100 ITR 125 (sic), and submitted that in all cases (supra) it has been held that in case assessee satisfies all conditions of allowing exemption under section 10A same is to be allowed to assessee irrespective of fact that for same unit in earlier assessment years assessee has been claiming benefit of deduction under section 80HHE of Act. 27. We have considered rival submissions of both parties, perused record and carefully gone through impugned order of tax authorities below as well as case law (supra) relied upon by ld. AR for assessee. 28. In instant case according to Assessing Officer assessee is not eligible to claim deduction under section 10A in subsequent assessment year i.e., 2001-02 under consideration because assessee claimed deduction under section 80HHE in earlier assessment year and same was allowed to assessee. Whereas, uncontrovertedly, assessee had filed revised return of income for assessment year 1999-2000 dated 2nd February, 2000-01 and claimed no deduction under section 10A of Act, as February, 2000-01 and claimed no deduction under section 10A of Act, as per paper book page Nos. 134-137. assessee had also not made claim of deduction under section 80HHE in respect of SSC Unit because it incurred loss and assessee simply claimed carry forward of losses, which meant that assessee had not claimed any deduction under section 80HHE either in assessment year 2001-02 or in any of preceding assessment year. Similarly, even in assessment year 2000-01, though assessee was eligible to claim of deduction under section 80HHE, yet, it did neither made or was allowed any such claim of deduction under section 80HHE of Income-tax Act, 1961 as per page Nos. 136-146 of paper book. 29. Now question required to be determined by us is whether assessee is entitled to claim deduction under section 10A in view of amended provisions, which are applicable to assessment year 2001-02, for activities carried out by SSC Unit of assessee when assessee had admittedly neither claimed deduction under section 80HHE for assessment year 2001-02 nor claimed or was allowed same in previous assessment years. This issue now stands covered in favour of assessee by various decisions (supra) of ITAT and by decisions (supra) of jurisdictional High Court of Delhi confirming decision (supra) of Tribunal in case of Legato Systems India (P.) Ltd. (supra) wherein in all cases (supra) it has been held that in case assessee fulfils criterion for claiming exemption as laid down under section 10A of Income-tax Act, 1961 in respect of profits of that unit it is eligible to claim same even if assessee earlier either claimed deduction under section 80HHE or is even entitled to claim deduction under section 80HHE. We find that ratio of decisions (supra) fully apply to facts and issue involved in instant case under consideration before Tribunal, therefore, respectfully following decisions (supra) we consider it appropriate to set aside orders of tax authorities below on issue of exemption under section 10A of Income-tax Act, 1961 as directed by Tribunal in cases of Legato Systems India (P.) Ltd. (supra) and Mentor Graphics (Noida) (P.) Ltd. (supra) as well as in Interra Software (I)(P.) Ltd. (supra) and restore matter to file of Assessing Officer with direction to allow exemption to assessee under section 10A in year under consideration in case assessee is able to satisfy all requisite as envisaged in scheme of section 10A of Act in light of decisions (supra) of Tribunal as well as in accordance with law. 30. For reasons stated above ground of appeal taken by revenue in its appeal is allowed for statistical purposes. 31. In result, instant appeal filed by assessee is partly allowed and appeal filed by revenue is allowed for statistical purposes in terms of order. *** EFUNDS INTERNATIONAL (P.) LTD. v. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(1), NEW DELHI