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12. Ground No. 1 is thus allowed.

13. In ground No. 2, the assessee has raised the following grievance :

"The CIT(A) has erred in confirming the disallowance of deduction of Rs. 1,17,50,722 claimed under Section 80HHE of the IT Act, 1961 ("the Act"), on the ground that the appellant failed to substantiate its claim of providing technical services for development of computer software."

14. So far as this grievance of the assessee is concerned, the material facts are like this. In the course of scrutiny assessment proceedings, the AO noticed that the assessee has claimed deduction of Rs. 1,17,59,722 under Section 80HHE of the Act. The AO requisitioned information and documents in support of the said claim of deduction. In response to this requisition, the assessee submitted a copy of the invoice and foreign inward remittance certificate for the fees earned in respect of technical services rendered outside India in connection with development of computer software. The assessee also submitted the details of fees earned in respect of providing technical services outside India and details of nature of work done for each of the software development job. The details of technical personnel, along with their technical qualification, deployed in connection with development of computer software were also filed. Upon examining these details and upon considering the submissions made by the assessee, however, the AO was not impressed with the merits of the said claim of deduction. The AO took note of the position that the assessee-firm was a member of Arthur Anderson Worldwide (AWSC) to which the assessee-firm also provided management and consultancy services. As per details submitted, according to the AO, the assessee-firm was deputing its personnel to the AWSC who in turn were deputing those employees to various contracts/project undertaken by them. By a single invoice, the assessee billed AWSC for US $ 19,24,888 in respect of the computer service and software. The assessee's deduction under Section 80HHE was in respect of US $ 5,98,579 billed on account of computer services and software. The AO also observed that there was no specific contract between AWSC and the assessee for development of software. The AO took note of the appraisal reports of persons said to be working on the software development projects but did not attach much importance to the same on the ground that the same cannot be treated as evidence of services provided for developing software. The AO also took note of the letter received from Arthur Anderson Consulting confirming that personnel were deputed at their clients for software development but rejected the same as of any (sic-no) evidentiary value on the ground that it does not provide any evidence to show that technical services were actually utilized for development of software. The letters written by AWSC to the assessee-firm on requirement of various personnel for deputations to the clients by observing that 'the assessee is a member firm of AWSC and, therefore, procuring such documents in the guise of consultancy for development of computer software to benefit the interest of its member firm (assessee) cannot be ruled out'. It was also noted that the assessee has given a gist of technical services provided by its personnel at the clients of AWSC, but this was also rejected on the ground that no corroborative evidence was there to support the same. The AO was also of the view that most of the persons sent to these jobs were "B.Coms, M.Coms and MBAs' without any technical qualifications. He thus held that these personnel did not have the requisite qualifications to carry out the job of development of computer software. The AO also concluded that the "assessee was simply supplying technical manpower to AWSC for carrying out various consultancy and management services in assisting them in execution of their contracts". For all these reasons, the AO declined deduction under Section 80HHE to the assessee. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. The CIT(A) observed that, as rightly pointed out by the AO, none of the documents conclusively prove that the services were rendered for development of computer software. It was also observed that it is not for the Anderson Consulting to confirm the services rendered, but such a confirmation should come only from the clients concerned. The CIT(A) went on sharing the AO's scepticism that the chances of" claiming what was received as consultancy and management services as amounts received on account of technical services for development of software in order to get the deduction under Section 80HHE cannot be ruled out. The AO's action was thus confirmed in first appeal. The assessee is not satisfied and is in second appeal before us.

15. We have heard the rival contentions, carefully perused the material before us and duly considered factual matrix of the case as also the applicable legal position.

16. We find that Section 80HHE of the Act provides the condition of eligibility for deduction under that section as that the assessee should be engaged in the business of (i) export out of India of computer software or its transmission from India to a place outside India by any means; or (ii) providing technical services outside India in connection with the development or production of computer software. Therefore, once an assessee can establish that the technical services were provided in connection with or for the purpose of the development of computer software, the assessee will be eligible for being considered for deduction under Section 80HHE. In the case before us, the assessee has furnished full details of the clients to whom the services were rendered in connection with development of software. These clients, as evident from the list of recipients of services at p. 104 of the paper book, include Nokia Telecommunication (Finland), Bayerische Verinsba (Germany}, Department of Social Security (United Kingdom), Shell International (United Kingdom), West Pac (Australia), Prudential Corporation (United Kingdom) and Caterpillar Asia (Singapore). The precise nature of services are also on record at p. 105 of the paper book. The qualifications of the persons actually working on these projects are also furnished. No doubt some of these persons are plain graduates but that fact by itself cannot mean that they lacked the requisite technical expertise to make a useful contribution in the development of computer software. In any event, detailed technical appraisals of the employees deputed on various software development jobs overseas are also on record. We have perused these details and we are of the view that these evidence cannot be simply brushed aside as the authorities below have chosen to do. We have also perused the confirmations by the local affiliate of AWSC who is handing the project and client concerned. The way these projects work is like this. Once a need arises for technical services at a project, the AWSC affiliate handling that project circulates the requirements to other offices. One such notification from Anderson Consulting (Finland) was placed before us at pp. 112 and 113 of the paper book. This communication gives details of the project, the work opportunity and the needed skills. Upon selection of the persons, the selected persons are taken on the project to render the technical services. The technical appraisals of the persons working on the project are also documented as also a confirmation is obtained from the AWSC affiliate handling the project.

17. In our considered view, these documents reasonably establish the fact that the said technical services are indeed rendered by the assessee's personnel. The mere fact that most of these evidences are in the nature of documentation of AWSC affiliates cannot lead to the conclusion that the documentation is unreliable. We have also noted that the detailed billing particulars in respect of each project are available. However, only because AWSC makes one billing adjustment does not vitiate the fact that the complete details of the relevant earnings are on record. It is not necessary that in respect of each billing unit a separate entry is required to be made by the AWSC. In our considered view, reasonable evidence in support of the services having been rendered by the assessee's personnel is on record. Even though the evidences are internal to the extent the evidences are primarily from AWSC, this fact by itself cannot indicate that the evidences are fabricated or unreliable, These are contemporaneous evidences and constitute reasonable basis for a finding that the assessee's personnel have rendered technical services for or in connection with development of computer software. We have also noted that the requisite chartered accountant certificate under Section 80HHE is also placed on record and no faults have been noticed in the same. The doubts raised by the AO and the CIT(A) are, in our considered view, ill-founded and unsustainable in law. Keeping in view of these facts, as also entirety of the case, we deem it fit and proper to direct the AO to grant deduction under Section 80HHE in accordance with the law and in the light of our above observations. The assessee will get relief accordingly.