TaxTMI 
TaxTMI 
2013 (2) TMI 150
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....ng the assessment years 1986-1987, 1987-1988, 1988-1989 and 1989-1990, respectively. 2. In all these cases, as common question of law arises for consideration and also as the common order has been passed by the Income Tax Appellate Tribunal, common judgment is pronounced. 3. The assessee is the company engaged in the business of granites in the name of 'M/s. Vijay Granites Pvt. Ltd'. The assessee / company filed its returns for the years 1986-1987, 1987-1988, 1988-1989 and 1989-1990. In respect of the assessment years 1986-1987 to 1988-1989, assessment was reopened under Section 147 of the Income Tax Act, 1961 (hereinafter will be referred to as "the Act") and in respect of the assessment year 1989-1990, there was regula....
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....l the four years. On appeal by the Department, the Tribunal also held that assessee is eligible for investment allowance i.e., deduction under Section 80I and also deduction under Section 80HHC of the Act. The Tribunal distinguished the decision of the Apex Court in the case of M/s. Stone Craft Enterprises, since in that case, details regarding activity carried on by the assessee were not produced before the Apex Court. The Tribunal also relied upon the circular No.729, dated 01.11.1995, wherein it has been clarified that once mechanical process is carried on the granite, deduction under Section 80HHC can be allowed. The contention of the Revenue that the amendment made by Finance Act No.2 of 1991 introducing schedule XII is effective only ....
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....nce Act No.2 of 1991, introducing Schedule II is effective only from the assessment year 1991-1992 and that the amendment is retrospective in nature. 8.1. Section 80HHC of the Act provides that 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, there shall, in accordance with and subject to provisions of this Section, be allowed, in computing the total income of the assessee, a deduction equal to the aggregate of 4% of the net foreign exchange realisation and 50% of so much of the profit derived by the assessee from the export of such goods or merchandise as exceed 4% of the ne....
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....re, not entitled to deduction under Section 80I of the Act:- (i) [2004] 267 ITR 606 (CIT vs. Vijay Granites Pvt. Ltd.,). In the facts and circumstances of the case, it was held that the act of cutting and polishing granite slabs before exporting them did not involve any process of manufacture or production to entitle the assessee to the benefit under Section 32A or 80I of the Act. (ii) Contending that when it is not established that the activity of the assessee would amount to manufacturing activity, the assessee is not entitled to deduction under Section 80I of the Act, the decision reported in [2003] 262 ITR 417 (CIT v. Pooshya Exports Pvt. Ltd.,) is relied upon, where-under it has been observed as follows:- " ... There is absolu....
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.... by the assessee. 9.4. A perusal of the order passed by the Tribunal only goes to show that there is a passing reference about the assessee exporting the granite stones cut and processed to foreign countries. How the processing is done is not explained. Whether the act of cutting and polishing granite slabs would amount to manufacture or production, in the facts and circumstances of these four cases, entitling the assessee to claim benefit under Section 32A or Section 80I of the Act would depend upon the facts and evidence, available/to be produced, by the assessee / Revenue. 9.5. It is relevant to quote the decision of the Supreme Court reported in Aspinwall and Co. Ltd., v. CIT [2001] 251 ITR 323, wherein the word 'man....