Smt. Asha Vijayaraghavan, Judicial Member - This appeal filed by the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-V, Hyderabad, dated July 6, 2010, for the assessment year 2004-05.

2. The assessee-company engaged in manufacturing of bulk drugs and intermediates, filed its return of income for the assessment year 2004-05 on October 28, 2004 declaring total taxable income of Rs. 82,29,600 after claiming deduction under section 80HHC at Rs. 18,40,275. The return was processed under section 143(1) of the Act on February 5, 2005.

3. The case was selected for scrutiny and by an order under section 143(3) dated December 22, 2006 had been passed and the income was assessed at Rs. 83,59,320 after allowing deduction under section 80HHC at Rs. 18,40,275. However, it was observed subsequently that the assessee had adopted incorrect adjusted export turnover and adjusted total turnover and also the eligible profits for working out deduction under section 80HHC. The assessee adopted eligible profits without reducing 90 per cent. of other income admitted as "conversion charges" and "technical consultancy charges" amounting to Rs. 21,87,459 as required under