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27. Learned First Appellate Authority has re-appreciated the controversy in details and allowed the exemption to the assessee. His detailed finding is worth to note:

"4.6 I have carefully considered the submissions of the Authorized Representative, remand report and rejoinder thereto. The A.O. had in his assessment order doubted the export of software to M/s LAM research. The Appellant has produced evidence in the form of banker's certificate for foreign remittance, copies of bills and other correspondence wit LAM research to prove that remittances came from the bank account of LAM research itself. The AO has also observed that LAM research is a fortune 500 company and hence there can be no doubt that there can be any falsity in the certificate issued by the bankers evidencing flow of funds from bank account of LAM research. Couriers sent to LAM research have also not been disputed by the AO in his remand report. Hence as regards the buyer is concerned no question can be raised against the same. The export of software also stands proven by the Softex returns filed by the appellant regularly in compliance to the STP I guidelines. Even on an enquiry by the AO from STP I, vide its letter dated 12.05.2005, the Joint Director of STP I has replied to the AO. The relevant contents of the reply are reproduced hereunder:

3.In case of Export of Software through data communication link The declaration of Export is in Softex form as per RBI guideline. The procedure of attestation of softex by STPI is based on declaration by the party in the softex forms, purchase order/agreement with the client back- up form submitted by the party and proof of Data-cum service provider. As per declaration on the back-up form total number oj Man hours spent is 13200.

Once it is undisputed that software was exported its existence could not have been doubted. Software can exist only when either it is "purchased" or it is "developed". The A.O. has, in fact, disbelieved the factum of development by the appellant and have simultaneously held that no evidence for purchase could be produced. On the other hand the appellant submits that there cannot be any evidence of purchase because the software written submissions developed. Similarly all the adverse conclusions drawn by the A.O has been controverted with cogent evidence by appellant. Such rebuttal has not been countered by the A.O. in remand report. It may be noted that Sh. Amod Srivastava had received payment of Rs.4.50 lakhs through account payee cheque and that he was franchisee of ET & T an Central Govt.. Undertaking under the name M/s. IFCOM NETWORK. It shows that he was also engaged in software activities Hence, the statement of Amod Srivastava in contradiction to these undisputed facts has no credentials. Moreover, no opportunity was given to cross examine Shri.Amod Srivastava .It is a trite law that the opportunity of cross-examination must be allowed to the assessee if any statement is recorded behind his back. In the facts of the instant case, such a requirement was imperative considering that the averments in the statement were contrary to the facts on record In absence of such cross examination even during remand proceeding such statement cannot be treated as "evidence" or "material" for the purpose of making assessment. Similarly ,in regard to the Inspector's report, it is noticed that the Inspector visited the premises after the 'closure of business. Moreover, the findings therein are in contradiction to the Audit of AG Allahabad and Softex returns filed before the authorities: In regard to the evidence of purchase and sale of computers ,the seller was registered with Sales-tax Department. Even the payment was made through account payee cheque. Regarding the issue of number of hours in development of software as mentioned in the letter of Joint Director, STPI, the total man hours spent for software development were 13200 and thus, it seems that the AO. by mistake had taken the number of hours i. e. 168 hours utilized for uploading the software as man hours utilized for development of software. It may be noted that the appellant submitted monthly reports regarding software export to the competent authority which has accepted the same in discharge of export obligation. It is also noted that the export of software was also declared on exports declaration form softex and the STP I also certified that the software described in the softex form was actually exported The export value has been received in foreign convertible exchange through proper banking channels as certified in Foreign Inward Remittance Certificates (FIRCs). There is no cogent country evidence on record to conclude that the appellant has not exported software to LAM Research USA. The appellant has also furnished a report of the Chartered Accountant in the prescribed format along with the return of income for claim of deduction u/s 10A of the Act. Hence, on consideration of totality of the facts and circumstances of the case, I am of the view that the appellant is eligible for the benefit u/s 10A of the Income-tax Act. Hence, the A.O is directed to allow the benefit u/s 10A of Rs. 5, 64, 62,8501- to the appellant".