The assessee was engaged in the business of import and re-export of goods carried out from the Special Economic Zone (SEZ) for Free Trade and Warehousing Zone (FTWZ). The AO disallowed the 10AA deduction claimed by the assessee on the ground that the assessee is not involved in the business of manufacturing or producing any article or things nor was the assessee into provision of services. The CIT(A) reversed the findings of the AO and allowed the deduction u/s 10AA. The ITAT observed that the term “services” is not defined under the Act and hence, referred to the definition provided u/s 2(z) of the SEZ Act, 2005 and Rule 76 of the SEZ Rules, 2006 which lists out the activities that fall within the meaning of services for the purpose of s. 2(z) of the SEZ Act, 2005. The ITAT observed that a conjoint reading of both the aforesaid provisions make it clear that the activity of trading falls within the meaning of services as defined u/s 2(z) of the Act. Further, the letter dated 20.06.2011 from the Ministry of Commerce and Industries clarifies that ‘trading’ for the purpose of the Second Schedule of the SEZ Act, 2005 shall mean import for the purpose of re-export. In view of the above observations and relying upon the decision of DCIT vs. Goenka Diamond and Jewellers Ltd. 19 taxmann.com 91(Jaipur) the ITAT upheld the order of the CIT(A) and dismissed Revenue’s appeal. (AY.2015-16, 2017-18)