Ms. Sushma Chowla, Judicial Member - Out of these four appeals, three appeals filed by the same assessee are against the different orders of CIT(A), Chandigarh, dt. 28th Nov., 2008, 25th Sept., 2009 and 26th Feb., 2010 relating to asst. yrs. 2005-06 to 2007-08 respectively against the orders passed under s. 143(3) of the IT Act, 1961. The Revenue has also filed an appeal in ITA No. 116/Chd/2010 relating to asst. yr. 2005-06 against which the assessee has filed cross-objection being C.O. No. 22/Chd/2010.

2. All the appeals/cross-objection relating to the same assessee and appeal of the Revenue having similar grounds were heard together and are being disposed of by this consolidated order for the sake of convenience.

3. The assessee in ITA No. 1115/Chd/2008 relating to asst. yr. 2005-06 has raised the following grounds of appeal :

"1.That the learned CIT(A) has further erred in holding that the assessee’s reasonable profit for the period 1st Oct., 2004 to 31st Jan., 2005 is the cost + @ 17 per cent as against the profit shown at 49 per cent merely on the suspicious premise holding it to be mode of computation of excessive profit which is arbitrary and unjustified.

2.That the learned CIT(A) has further erred in holding that the assessee would not be eligible for deduction under s. 10B on the difference of profit shown by the assessee and the profit taken cost + @ 17 per cent holding it to be taxable which otherwise is exempt under s. 10B of the Act and as such is arbitrary and unjustified.

3.That the learned CIT(A) has further erred in upholding the disallowance of Rs. 5,54,752 invoking the provisions of s. 14A of the Act which is arbitrary and unjustified."

4. The Revenue in ITA No. 116/Chd/2009 relating to asst. yr. 2005-06 has raised the following grounds of appeal :

"1.On the facts and circumstances of the case and in law, the learned CIT(A) has erred in allowing appeal of the assessee without appreciating the facts of the case.

2.Whether on the facts and circumstances of the case, the learned CIT(A) has erred in allowing exemption under s. 10B of the IT Act.

3.Whether on the facts and circumstances of the case, the learned CIT(A) has erred in deleting the addition made by the AO on account of expenditure incurred by the assessee to the tune of Rs. 48,22,679 under s. 69C r/w s. 10B(7) and disallowance of an expenditure of Rs. 5,54,752 incurred by the assessee company under s. 14A of the IT Act, 1961."

5. The following grounds have been raised by assessee in the cross-objection in C.O. 22/Chd/2000 relating to asst. yr. 2005-06 :

"1.That the exemption under s. 10B of the IT Act is allowable to the assessee which has also been allowed by the AO himself in the subsequent assessment year i.e. 2006-07 and now to say that the learned CIT(A) has erred in allowing exemption under s.10B of the Act is wholly unwarranted.

2.That the learned CIT(A) has rightly deleted the addition of Rs. 48,22,679 made under s. 69C r/w s. 10B(7) of the Act made by the learned AO allegedly on account of expenditure incurred by the appellant outside the books of account.

3.That the learned CIT(A) has wrongly upheld the disallowance of an expenditure of Rs. 5,54,752 under s. 14A of the Act while the assessee did not claim any such deduction by way of expenditure. As a matter of fact no such relief has been allowed by the learned CIT(A) and the ground of appeal of the Department is untenable."

6. The assessee in ITA No. 1066/Chd/2010 relating to asst. yr. 2006-07 and in ITA No. 294/Chd/2010 relating to asst. yr. 2007-08 has raised the following common grounds of appeal :

"4. That the learned CIT(A) has erred in holding that the assessee’s reasonable profit during the year is the cost + @ 22 per cent as against the profit shown at Rs. 54.14 per cent (asst. yr. 2006-07) and 52.70 per cent (asst. yr. 2007-08) merely on the suspicious premise holding it to be mode of computation of excessive profit which is arbitrary and unjustified.

5. That the learned CIT(A) has further e