Karnataka High Court
Commissioner Of Income-Tax vs Raghavendra Trading Co. on 26 November, 1999
Equivalent citations: [2001]250ITR595(KAR), [2001]250ITR595(KARN)
JUDGMENT V.K. Singhal, J.
1. The Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated July 21, 1997, in respect of the assessment yean 1992-93, 1993-94 and 1994-95 :
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in allowing deduction under Section 80HHC in respect of export of granites ?"
2. The facts of the case are that during the relevant year the assessee was engaged in the business of quarrying and exporting the granite ores. The Tribunal found in its order that undisputedly, the granite blocks, alter being quarried, were being cut into size and also dressed, i.e., some initial polish is given thereto. The assessee claimed deduction under Section 80HHC on the export income of the granites. The claim of the assessee was denied by the Assessing Officer, which was again confirmed by the Commissioner of income-tax (Appeals). The assessee filed further appeal before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal after taking into consideration the facts of the case and various decisions of different authorities and mainly relying on its earlier order dated May 19. 1997, in ITA No. 162/Bang. of 1996 in the case of God Granites, allowed the claim of the assessee.
3. The controversy is covered by the judgment given in the case of CAT v. God Granites [1999] 240 ITR 343 (Kar)-ITRC No. 440 of 1998 and other connected matters decided on July 31, 1999, wherein after taking into consideration the judgment of the apex court in Stonecraft Enterprises v. CIT [1999] 237 ITR 131, subsequent change of law by the Finance (No. 2} Act, 1991. and the circular issued by the Central Board of Direct Taxes, it was observed that, since the blocks were cut into size, dressed and polished, therefore, the assessee would be entitled for the benefit under Section 80HHC. Following the said decision we are of the view that the Tribunal was right in law in allowing deduction under Section 80HHC in respect of export of granites. Accordingly, the references are answered in favour of the assessee and against the Revenue.
4. Sri M. V. Seshachala, learned counsel is permitted to file memo of appearance within two weeks.