STONECRAFT ENTERPRISES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) We are concerned in these appeals with the Assessment Years 1985-86, 1987-88 and 1988-89. Two questions are before us but it is apparent that the question really to be answered is the first one. The questions read thus :

(2.) There is no material in the finding of the Tribunal other than the indication that the assessee exports granite. The assessee claimed for the granite which it exported the deduction available under S. 80-HHC of the Income-tax Act, 1961 as inserted by the Finance Act, 1983 with effect from 1st April, 1983. The relevant provision permits, where "an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies," the deduction in the computation of its total income of an amount not exceeding 50% of "the profits derived by the assessee from the export of such goods or merchandise." Sub-section (2)(b) states : "This section does not apply to the following goods or merchandise, namely : (i) mineral oil; and (ii) minerals and ores."

(3.) It is the contention of learned counsel for the assessee that while granite is a mineral in the general sense, it is not a mineral for purpose of S. 80-HHC and that, therefore, the deduction provided for therein is available to the assessee. Our attention has been drawn to the provision as it read before the appropriate year and thereafter. Our attention has also been drawn to a circular issued in the context of the later provision. This circular, issued by the Central Board of Direct Taxes, is dated 1st November, 1995 and records the Board's opinion that while granite alone can be considered as a mineral, any process applied to granite would deprive the quality of rough minerals from the dimensional blocks of granite, which was a value added marketable commodity; therefore profits derived from export of granite dimensional blocks would be eligible for deduction under S. 80-HHC of the Act. As we have already noted, there is nothing on record to indicate that what the assessee exports is such value added granite so that, even assuming that the said circular is explanatory and can, therefore, relate back to the year in question, the assessee cannot derive any assistance therefrom.