TaxTMI 
TaxTMI 
2002 (11) TMI 48
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.... The facts as stated in the statement of case are as follows: The assessee is a company doing business of mining and quarrying of granite stones and exporting them as finished goods to various countries. Before exporting these granite stones, as per the specification of the customers, the stone underwent various types of manual and machinery processes such as removal of over burden of the quarry by manual, process, location and drilling of the boulders, eschewing of waste, drilling of holes, lifting these granite logs either manually or with the help of cranes, dressing shaping, sizing, colouring and giving uniform grains to these stones, etc., and the process also involved removing of certain natural flaws such as air-pores, veins, crack etc., in order to ensure quality of the product. Certain chemical impurities are also required to be removed in special manufacturing process, which requires special machines/equipments, etc., like jet burners, block cutters, vertical and horizontal drilling machines, etc. During the course of assessment, proceedings, the Assessing Officer negatived the assessee's claim for investment allowance in a sum of Rs. 71,070 on the ground that the a....
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....l for coming to the conclusion also took into consideration Circular No. 729, of the Central Board of Direct Taxes, dated November 1, 1995. Thus, the Tribunal 1 granted both the reliefs as claimed by the assessee. Hence, at the instance of the Revenue, the above reference is made. As far as the first question is concerned, the counsel on either side accepted that the same has to be decided against the assessee and in favour of the Revenue in view of the judgments of this court in the case of CIT v. Gomatesh Granites [2000] 246 ITR 737 and in the case of CIT v. Bishal Enterprises [2001] 247 ITR 484. Hence, the first question is answered in the negative against the assessee and in favour of the Revenue. In respect of the second question, learned counsel for the Revenue submitted that the view taken by the Commissioner of Income-tax (Appeals) and confirmed by the Tribunal that the assessee is entitled to the benefit under section 80HHC is unsustainable in law when the very provision itself excluded any benefit in respect of export of mineral offs, minerals and mineral ores at the relevant assessment years. Insertion made to sub-clause (ii) of clause (b) of sub-section (2) of sec....
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....benefit should be given by construing that the amendment would be applicable retrospectively. Such a construction would only advance the intention of Parliament. When Parliament intended to give the benefit under section 80HHC to the export of granite, which earns valuable foreign exchange for our country, it should not be restricted to the date from which the amendment was introduced. That would defeat the Parliamentary intent. He also placed reliance on the circular of the Central Board of Direct Taxes in Circular No. 729, dated November 1, 1995, and also the earlier circular in Circular No. 693, dated November 17, 1994 and contended that in the case of CIT v. God Granites [1999] 240 ITR 343, the Karnataka High Court construed these two circulars and has taken a view that the circulars are clarificatory and relate back to the years prior to the amendment also. We heard the arguments of learned counsel appearing on either side. In order to resolve the question, it is appropriate to refer the relevant provisions of the statute, i.e., section 80HHC of the Income-tax Act. Section 80HHC provides that where an assessee, being an Indian company or a person (other than a company....
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....anguage of the amendment warrant such a view. When the benefit of section 80HHC is specifically excluded in respect of goods or merchandise like mineral oils and minerals and mineral ores originally and by means of subsequent amendment certain exception has been carved out from and out of the excluded goods or merchandise for the purpose of giving the benefit, such exclusion cannot be regarded as indicative of an intention on the part of the Legislature to have treated what is subsequently included as having been included at the inception of the provision. It would not also be permissible for the court to supplement words of its own to the words employed by the Legislature in the name of giving effect to the supposed intention of the Legislature in bringing about the amendment. The object of the provision has to be gathered on a reasonable interpretation of the language employed by the Legislature. For the above proposition we draw the support of the Division Bench judgment of this court in the caw of CWT v. Varadharaja Theatres P. Ltd. [2001] 250 ITR 523 and also from the case of CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412 (SC). It is the elementary principle of interpreta....
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....ctually paid by the assessee in the next accounting year, if it is paid on or before the due date for furnishing the return of income in respect of the previous year, in which the liability to, pay such sum was incurred. However, the expression "any sum payable" employed in clause (a) of section 43B was open to the interpretation that the amount payable in a particular year, should also be statutorily payable under the relevant statute in the same year. An Explanation was therefore added by the Finance Act, 1989, with retrospective effect from, April 1, 1984, for the purpose of removing any ambiguity about the term "any sum payable" under, clause (a) of section 43B. While construing the Explanation, which has been inserted with retrospective effect in order to give effect to the section as a whole including the proviso it was held by the apex court that the proviso which was inserted to remedy unintended consequences and to make the provision workable by supplying an obvious omission in the section is required to be read into the section to give the section a reasonable interpretation and required to be treated as retrospective in operation so that a reasonable interpretation can b....
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....no material on record to indicate as to how the rough granite blocks become value added granite, which were exported by the assessee. In the statements of case, it is stated that the assessee does the business of quarrying and mining of granite and exporting them as finished goods. In the assessment order it is stated that the business of the assessee is export of raw granite blocks and no processing and manufacturing activities are involved. The Commissioner of Income-tax (Appeals) has stated that the assessee has given a long note as to how the work of the assessee involved manufacture. But thoroughly failed to discuss any of the processes as given in the note. The Tribunal in its turn simply jumped to the conclusion on the premise that cutting the rough edges processing in different sizes, shapes colour would amount to manufacture, without discussing the processes involved. In the absence of any particulars on record to construe that the exported granites are value added, even assuming that the circular is explanatory and as such the benefit under section 80HHC is available for the assessment year under consideration, the, benefit in our view cannot be granted to the assessee. W....