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5. The case of the petitioner is as follows:

(a) The petitioner is a Private Limited Company incorporated under the Companies Act, 1956 and engaged in the business of development of computer software and related services and its export and provides various software solutions to variety of industries. The petitioner carries out its business activities through various units set up in Software Technology Parks (STPs) and Special Economic Zones (SEZs) and claims deduction under Section 10-A and 10-AA of the Act.

(f) The main issue, viz., disallowance of tax holiday benefit on receipt towards software maintenance, was dealt in a different manner in assessment year 2009-10 from the one dealt in assessment year 2008-09. In the appellate order for assessment year 2008-09, the CIT(A) relied on the recent circular issued by the CBDT in Circular No.1/2013 in F.No.178/84/2012-ITA.1, dated 17.1.2013 and held that software maintenance activity is also eligible for tax holiday under Section 10-A/10-AA of the Act. However, in the assessment order completed for the assessment year 2009-10, when this Circular of CBDT, dated 17.1.2013 was pointed out by the petitioner-assessee, it was specifically brought out by the assessing officer that the assessee-Company has not complied with the requirement specified in the Circular.

(g) As per the Circular, it is necessary that there must exist a direct and intimate nexus or connection of development of software done abroad with the eligible units set up in India and such development of software should be pursuant to a contract between the client and the eligible unit. However, the petitioner-Company could produce only an MoU entered into between the principal holding company, viz., Cognizant Inc. USA and there is no agreement with the client or the final site of maintenance. Based on these and after elaborate analysis of the facts, the tax holiday claimed on overseas software maintenance was denied in the assessment order, which resulted in substantial reduction in tax holiday under Section 10-A/10-AA of the Act, i.e. from Rs.2163,35,14,860/- claimed by the assessee-Company to Rs.1004,40,71,894/-. Based on the findings made in the assessment year 2009-10, the order of CIT (Appeals) granting relief to the assessee on the issue of tax holiday on overseas software maintenance was not accepted and it is proposed to file further appeal by the Department before the I.T.A.T.

12. I have heard the learned counsel appearing for the parties and perused the material documents available on record.

13. It is seen that the petitioner-Company is an assessee in PAN.No.AAACD3312M and they are engaged in the business of development of computer software and related services and its export and they provide various software solutions to variety of industries. The petitioner carries out their business activities through various units set up in Software Technology Parks (STPs) and Special Economic Zones (SEZs) and claims deduction under Section 10-A and 10-AA of the Act. It is the case of the petitioner that for the assessment year 2008-09, the petitioner filed their Return of income on 29.9.2008 and the same was processed under Section 143(1) of the Act on 8.3.2010. The petitioner's case was selected for scrutiny by the Assistant Commissioner of Income Tax under Section 143(2) of the Act on 12.8.2009 and the details were called for by the respondent under Section 142(1) of the Act on 26.8.2011 and the petitioner claims that detailed submissions were made by the petitioner before the respondent from time to time.