Commissioner Of Income Taxsalem v. M/S. Obli Granitessalem

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 3.10.2007 CORAM THE HONOURABLE MR. JUSTICE K. RAVIRAJA PANDIANAND THE HONOURABLE MRS. JUSTICE CHITRA VENKATARAMAN TAX CASE APPEAL NO.347 OF 2004 Commissioner of Income TaxSalem. ... Appellant Vs. M/s. Obli GranitesSalem. ... Respondent Tax Case Appeal filed against the order of the Income Tax AppellateTribunal, Madras `D' Bench, dated 15.5.2002 in I.T.A.No.1537/Mds/94,against the order of the Commissioner of Income Tax (Appeals),Coimbatore,dt.21.4.94 in ITA.No.79-C,80-C and 81-C/94-95 against the orderof the Asst.Commissioner of Income Tax, Central Circle II, Coimbatoredt.31.3.94 in P.A.No.47-054-Fq-7019/Cent.II/CBE. For Appellant : Mr. T. Ravikumar Standing Counsel for Income Tax J U D G M E N T (Judgment of the Court was delivered byK. Raviraja Pandian, J.) The Revenue has filed this appeal against the order of theTribunal dated 15.5.2002 made in I.T.A.No.1537/Mds/94. https://hcservices.ecourts.gov.in/hcservices/ of law:- 2. The appeal was admitted on the following substantial question " Whether, on the facts and in the circumstances of thecase, the Tribunal was right in holding that the benefit ofsection 80HHC is available for the export of granite slabsfor the year 1989-1990?" 3. The material facts for the purpose of disposal of the appealis as follows:- The assessee is a partnership firm carrying on business ingranites. For the assessment year 1989-1990, the assessee had claimed thebenefit of deduction under Section 80HHC for export of rough granites. TheAssessing Officer denied the benefit of the exemption under Section 80HHCon the ground that the granites fall under the category of ores andminerals and are not eligible for the benefit of 80HHC. The AssessingOfficer relied on the judgment of the Supreme Court in the case of Stateof Mysore vs. Swamy Satyanand Saraswathi reported in AIR 1971 SC 1569 andthe Karnataka High Court in the case of Muddeereswari Mining Industriesvs. CIT reported in 204 ITR 550 to reach such conclusion. Aggrieved bythe assessment order, the assessee preferred an appeal before theCommissioner of Income Tax (Appeals). He gave relief to the assesseeholding that the amendment to Section 80HHC by Finance Act, 1990 whichamended the 12[th] Schedule to include "cut and polished minerals and rocksincluding cut and polished granites", should be read as explanatory andthat the benefit under Section 80HHC was available even during the earlieryears. Aggrieved by the order of the Commissioner of Income Tax(Appeals), the Revenue filed an appeal before the Income Tax AppellateTribunal on the ground that during the relevant assessment year, mineralsand ores were not eligible for the benefit of Section 80HHC and thesubsequent amendment including the same cannot be given the retrospectivebenefits. However, the Tribunal by the impugned order dismissed theDepartment's appeal holding that even prior to the amendment including"cut and polished minerals and rocks including cut and polished granites"for the benefit of Section 80HHC, the income from export of granite iseligible for its benefit. The correctness of the said order is now put inissue before this Court by filing the appeal and framing the question oflaw as aforesaid. 3. We heard the learned standing counsel appearing for theRevenue and perused the materials placed on record. 4. The issue is squarely covered by the three Judges Benchjudgment in GEM GRANITES VS. COMMISSIONER OF INCOME TAX reported in 271ITR 332, wherein it has been held that the assessee which exported thegranites after being cut and polished was not entitled to claim the 3. We heard the learned standing counsel appearing for theRevenue and perused the materials placed on record. 4. The issue is squarely covered by the three Judges Benchjudgment in GEM GRANITES VS. COMMISSIONER OF INCOME TAX reported in 271ITR 332, wherein it has been held that the assessee which exported thegranites after being cut and polished was not entitled to claim the deduction under Section 80HHC of the Income Tax Act, 1961, in respect ofthe profits from the export business for the assessment year 1987-1988.For the assessment year prior to the incorporation of the amendment tosub-section 2 of Section 80HHC in the year 1991, the very same issue hasbeen considered by us following the Supreme Court judgment in T.C.Nos. 426& 427 of 2004, dated 16.8.2007. Hence, the tax case appeal is allowed infavour of the Revenue. No costs. kb Sd/-Asst.Registrar /true copy/ Sub Asst.RegistrarTo,1. The Commissioner of Income Tax, Salem.2. The Asst.Registrar, income Tax Appellate Tribunal, Rajaji Bhavan, III Floor, Besant Nagar, Madras-90.3. The Asst.Commissioner of Income Tax, Central Circle II, Chennai Bench 'D', Coimbatore.4. The Commissioner of Income Tax, (Appeals) Coimbatore.+1 cc to Mr.N.Muralikumaran, Advocate Sr.No.61782.RA(CO)dcp/18.10T.C.(A)No.347 of 2004