Income Tax Appellate Tribunal - Mumbai
Income-Tax Officer vs Srichand Hariram on 11 September, 1996
ORDER
M.K. Chaturvedi (JM)
1. This appeal by the revenue is directed against the order of the Deputy Commissioner of Income-tax (Appeals), C-Range, Mumbai, and pertains to the assessment year 1983-84.
2. The solitary ground raised in this appeal projects the following grievance.
"On the facts and in the circumstances of the case and in law the learned Dy. CIT(A) erred in allowing deduction claimed under section 80HHC of the Income-tax Act on the exporting of agricultural primary commodities."
3. We have heard the rival submissions in the light of the material placed before us and the precedents relied upon. During the relevant assessment year, assessee exported the following goods :
Description Amount (Rs.)
Grapes 2,75,990
Water Melon 51,760
Chickoo 5,820
Oranges 31,900
Mangoes 57,42,654
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Total 61,08,124
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On the aforesaid amount, assessee claimed deduction under section 80HHC as under :
1% on total turnover Rs. 61,081
5% of excess of the previous assessment
year export sales 2,52,450
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3,13,531
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4. Section 80HHC as it stood at the relevant point of time reads as under :
"Deduction in respect of Export turnover -
(1) Where the assessee being an Indian company of a person (other than a company) who is resident in India, exports out of India during the previous year relevant to an assessment year any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, the following deductions, namely :-
(a) a deduction of an amount equal to one per cent of the export turnover of such goods or merchandise during the previous year; and
(b) a deduction of an amount equal to five per cent of the amount by which the export turnover of such goods or merchandise during the previous year exceeds the export turnover of such goods or merchandise during the immediately preceding year.
(2)(a) This section applies to all goods or merchandise (other than those specified in clause (b)) if the sale proceeds of such of goods or merchandise exported out of India are receivable by the assessee in convertible foreign exchange.
(b) The goods or merchandise referred to in clause (a) are the following, namely :
(i) agricultural primary commodities, not being produce of plantations;
(ii) ...............................................
(iii) ..............................................
(iv) ..............................................."
5. In the opinion of the Assessing Officer the goods exported by the assessee was of the nature of primary agricultural commodity. These were not the produces of plantation. He accordingly denied the claim of the assessee made under section 80HHC. The Dy. CIT(A) for the reasons recorded in the order reversed the order of the Assessing Officer.
6. The assessee placed before us a copy of opinion given by the Current Tax Reporter. This is reproduced here as under :
"Query No. 6.
DEDUCTION UNDER SECTION 80HHC My clients have exported fresh fruits i.e. mangoes, apples and grapes to Arabic countries during assessment year 1983-84.
I would like to know whether my clients are justified in claiming deduction under section 80HHC on export of mangoes, apples and grapes.
Reply - Section 80HHC as inserted in the Income-tax Act by the Finance Act, 1983 with effect from 1-1-1983 is not applicable to the export of agricultural primary commodities but not the produce of plantations. Since mangoes exported by the F.S.C. are definitely produce of plantation, provisions of section 80HHC would be applicable. Deduction under that section will be allowed."
7. It was vehemently contended before us by Shri Vinod Teckchandani, learned counsel for the assessee, that the goods exported by the assessee were of the nature of produce of plantation. Our attention was reveted on the dictionary meaning of the word "plantation".
8. Our attention was also invited on an article published in the Economic Times dated 11th May, 1987 wherein it was mentioned -
"Plantation crops such as tea, coffee and rubber condiments and spices, fruits and vegetables, sugarcane, tobacco."
Similarly, the learned counsel referred one article published in the Economic Times dated 21-5-1987 under the caption "Scope of Horticultural Development in Konkan", wherein the scope of mango plantation was discussed.
9. The learned departmental representative also relied on the dictionary meaning of the word "plantation". It was stated that the fruits exported by the assessee cannot be categorised as the produce of plantation. These were explained to be primary agricultural produce.
10. It would be in the fitness of things to find out the etymological meaning of the word "plantation". As per the Webster Comprehensive Dictionary (International Edition) the word 'plantation' is defined as under :
"Plantation : (1) Any place that is planted; especially a farm or estate of many acres in the Southern United States planted in cotton, tobacco, rice or sugarcane, and formerly worked by slave labour. (2) A colony. (3) An oyster bed or oyster farm. (4) A grove cultivated to provide a certain product. (5) The act of planting."
11. In the case of Lubbock v. Pops 7 East 455, Justice Ellenborough defined the word 'plantation' as under :
"Plantation in its common known signification is applicable only to colonies abroad where things are grown or which were settled for the purpose principally for raising produce."
12. Wilfred Funk in his book 'Word Origins and their Romantic Stories' given the meaning of the word 'agriculture' at page 353 as :
"Agriculture is the Latin agri cultura, 'tilling the field'"
13. In the Concise Oxford Dictionary the word "plantation" is defined as under :
"Assemblage of planted growing plants, esp. trees; estate on which cotton, tobacco, etc., are cultivated (formerly by Servile Labour); song (of the kind sung by Negroes on Americans) (list) colonization, colony."
14. As per Chambers Twentieth Century Dictionary the word "plantation" is defined as under :
"A place planted, esp. with trees, a colony, an estate used for growing cotton, rubber, tea, sugar or other product of warm countries."
15. The apex court in the case of CGT v. N.S. Getti Chettiar [1971] 82 ITR 599, 605-6 (SC) has held -
"Words in the section of a statute are not to be interpreted by having those words in one hand and the dictionary in the other. In spelling out the meaning of the words in a section, one must take into consideration the setting in which those terms are used and the purpose that they are intended to serve."
16. Section 80HHC(2)(b)(i) refers to agricultural primary commodities, not being produce of plantations. The connotation of the word "agricultural" is much wider. Latin "agri cultura" refers to tilling the field. What is the produce of plantation ? We are required to decide this issue. Dictionary speaks about the meaning of the word "plantation". In some dictionary items are listed such as tea, coffee, rubber, etc. A grove cultivated to provide certain product is also listed under the word "plantation", in Webster Comprehensive Dictionary - Mango is associated with grove, apple with orchard and grapes with vine yard. What is grove ? The word grove is used for the group of trees. What is 'Orchard' ? Wilfred Funk defined it as under [at page 146 of the book "Word Origins"] -
"The word orchard is a pleasant name that just means a 'garden yard'. Some Centuries ago, it was spelled ortgeard. The ort part is an adaptation of the Latin word hortus, 'garden', and 'geard', which is just an old English spelling of 'yard'. It is nice today to survey a 'garden yard'.
'Vine yard -
The term 'Vineyard in Concise Oxford Dictionary is defined as under :
'Plantation of grape - vines'."
17. We are concerned with the meaning of the term "agricultural primary commodities" and "the produce of plantations". The benefit of section 80HHC is available if the articles exported is a produce of plantation. It is not available if it is 'agricultural primary commodities'. Mangoes and other fruits are grown in the gardens. Agricultural commodities are grown in the fields not in the gardens. The words grove, orehard and vineyard, therefore, assumes importance. Therefore, fruits are associated with the produce of plantations. As such, deduction under section 80HHC cannot be denied to the assessee. We have perused the reasonings given by the learned Dy. CIT(A). In our opinion, he has taken a correct view in the matter and his order calls for no interference. Accordingly, we uphold the same.
18. In the result, the appeal of the revenue stands dismissed.