prasad
Prasad,
Did your lawyer told you why you were not eligibl;e for H1 extension. As far as I know your eligible to extend your H1B status until you fill up six year limit. Does not matter how long or what stage you are in with you I-485 application. When you have the option to apply for EAD, some company prefer to apply for EAD instead of H1B1 as they way it costs less.
If your company does not have any problem to renew your H1B, you can always extend it and continue to work on H1B1.
Some people prefer to have EAD with them even when they are in valid H1 status thinking if they have to change the company or have to walk away from H1 sponsoring company and get a job as soon as possible.