2014 (11) TMI 801

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....;   "Whether on the facts and in the circumstances of the case, the ITAT was justified in holding that the expression "Minerals" does not include salt and therefore the assessee Company was eligible to deduction under section 80HHC" 2. The facts leading to the present tax appeal in a nutshell are set out as under: 2.1 The assessee Company filed its return of income for the assessment year 1991-92 on the total income of Rs. 18,90,000 from business of salt manufacturing. During the year, it had exported salt and therefore deduction of Rs. 6,98,313/- was claimed under section 80HHC which was allowed in original assessment. Subsequently on the perusal of records, CIT observed that the order u/s 143(3) was erroneous inasmuch as ....

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.... passed by the CIT as well as the Tribunal. The Tribunal in the impugned judgment and order has observed that the Constitution has made a clear distinction between minerals and salt. Following the decision of the Ahmedabad Bench of the Tribunal in the case of Assistant Commissioner of Income Tax (Investigation ) Circle, Bhuj vs. M/s. Krishna Salt Indus, Gandhidham passed in ATA Nos. 5481 & 5482/Ahd/89, the ITAT held that salt cannot be termed to be a mineral or ore. 6. The relevant portion of the Tribunal's order impugned in the present appeal is reproduced hereunder:                "7. Referring to Schedule XII of the Act, it was pointed out that salt did not form ....

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.... of CIT vs. Sun Engineering Works P. Ltd.           13. In the present case we are not concerned with the Marwar Act not with condition obtaining in the ersthwile state of Marwar at the relevant time. The Income Tax Act 1961 with which we are concerned has necessarily to be read in consonance with the Constitution of India. As mentioned above, the Constitution makes a clear distinction between minerals and salt. Hence, there is no reason or basis for us to interpret the word "mineral" as inclusive of salt. Therefore, respectfully following the decision of the Ahmedabad Bench of the Tribunal in the case of Krishna Salt Industries (supra), we hold that assessee is entitled to deduction u/s 80HHC i....