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3.5 On the basis of avove report, it was observed by the Assessing Officer that Aapkidukaan.com Corporation was never active. LNSEL had exported nothing and alternatively, assessee did not develop any software and nor exported. In response to further query made in this regard, assessee contended that as Aapkidukaan.Com Corporation dealt with LNSL, who issued disclaimer Certificate to assessee.

3.6 After taking into account the above explanation of the assessee, Assessing Officer observed that though assessee stressed on the admissibility of exemption u/s.10B of the Act claimed and allowed by the department to the exporter company to whom permission was granted by STPI vide letter dated 30.04.1992 and if this was a case, then what is the fate of a certificate of recognition of Software Export House w.e.f. 01.04.2002 issued by the Jt. Director General of Foreign Trade, Kolkata vide No.013420 dated 03.04.2003 addressed to M/s. Lee & Nee Software (Export) Ltd. As regards to the source code, it was stated that the documents were lying with the department, therefore, the assessee was not in a position to provide any further clarification. According to Assessing Officer, a prudent businessman could not forget the basic ingredients of any products manufactured by him by which he has flourished and therefore, the plea that documents were with the department I TA N o s . 8 8 9 t o 8 9 2 , 1 4 8 1 , 1 5 2 7 , 1 5 2 8 & 1 4 0 2 / M u m / 0 9 A.Ys . 00-01 & 03-04 (M/s. Shreepati Com pute rs) Page 11 could not be accepted by him. Regarding export of software, it had enclosed a copy of Softex Form certified by the STPI, in which name of the assessee appeared as supporting manufacturer. According to Assessing Officer, the Foreign Tax Division had not come across any transaction in its inquiries. It has found that Aapkidukaan.com, USA was never active. Foreign Tax Division also found that agreement between Aapkidukaan.com and Lee & Nee Software Ltd. never materialized.

5. The source code of the softwares developed could not be provided by the appellant firm as well as by Director of M/s. LNSEL, Shri S.M. Gupta.

6. The enquiry made by Foreign Tax Division with respect to the transmission of software developed to Aapkidukan.com Corporation, did not come across any such transaction. Further the said company had two bank accounts but the owners of Aapkidukan.com were not the owners of these accounts.

Thus, it is clear on the basis of material on record that claim of assessee u/s.80HHE of the Act is in order. I TA N o s . 8 8 9 t o 8 9 2 , 1 4 8 1 , 1 5 2 7 , 1 5 2 8 & 1 4 0 2 / M u m / 0 9 A.Ys . 00-01 & 03-04 (M/s. Shreepati Com pute rs) Page 35 5.8.4 Next issue is that the source code of the softwares developed could not be provided by the assessee firm as well as by Director of M/s. LNSEL, Shri S.M. Gupta. The said statement made by Assessing Officer on page no. 14 para 10 of the assessment order. In this regard, it was submitted that the source code as requested Assessing Officer was very much provided to the search team during the course of investigation on 14.06.05, at Mumbai Income Tax office. The said information was provided to Assessing Officer vide letter dated 14.11.07 and same has also been reproduced in the assessment order on page 11 of the assessment order. During the search, CDs containing source code were seized and same were with the department. Copy of the panchnama which is is on page no 125 to 134 of the paperbook clarifies this fact in nutshell that the source code information was already in the possession of the income tax authorities and the appellant firm was handicapped on account of the seizure from producing the relevant source code. CIT(A) in para 7.7 page 30 of his order has accepted the assessee's justification of non-furnishing of source code. Nothing prevented the Assessing Officer from verifying the contentions of the assessee as the relevant material was in the possession of the Department from the date of the search Operations itself. This fact has been completely overlooked by the Assessing Officer, which is not justified. So, CIT(A) was justified on taken favourable view.