Export deduction for processed granite blocks upheld where cutting, dressing and partial polishing satisfied the statutory requirement.

Deduction under section 80HHC was admissible on export of granite blocks that had been cut, dressed and partially polished. Applying the earlier binding view and the legal position after the relevant change in law, the Court treated the exported goods as processed granite for purposes of the export deduction. The Revenue's objection was rejected, and the Tribunal's allowance of the deduction was upheld in favour of the assessee.

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Issues: Whether deduction under section 80HHC of the Income-tax Act, 1961 was admissible on export of granite blocks that had been cut into size, dressed and partially polished.

Analysis: The assessee exported granite blocks after quarrying and subjecting them to cutting, dressing and initial polishing. The Court followed the earlier binding view on the same issue and the legal position emerging after the relevant change in law, holding that such processed granite blocks satisfied the requirement for the export deduction claimed. The revenue's objection was rejected in light of the treatment of the material as processed granite for purposes of the deduction.

Conclusion: The Tribunal was right in allowing deduction under section 80HHC, and the question referred was answered in favour of the assessee.

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