Karnataka H.C : Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in allowing deduction under s. 80HHC in respect of export of granites ?

Counsel Appeared

M.V. Seshachala, for the Revenue : K.R. Prasad, for the Assessee

JUDGMENT

V.K. SINGHAL, J. :

The Tribunal has referred the following question of law arising out of its order dt. 21st July, 1997, in respect of the asst. yrs. 1992-93, 1993-94 and 1994-95 :

“Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in allowing deduction under s. 80HHC in respect of export of granites ?”

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, after being quarried, were being cut into size and also dressed, i.e., some initial polish is given thereto. The assessee claimed deduction under s. 80HHC on the export income of the granites. The claim of the assessee was denied by the AO, which was again confirmed by the CIT(A). The assessee filed further appeal before the Tribunal. The Tribunal after taking into consideration the facts of the case and various decisions of different authorities and mainly relying on its earlier order dt. 19th May, 1997, in ITA No. 162/Bang. of 1996 in the case of God Granites, allowed the claim of the assessee

The controversy is covered by the judgment given in the case of CIT vs. God Granites (1999) 156 CTR (Kar) 327 : (1999) 240 ITR 343 (Kar)—ITRC No. 440 of 1998 and other connected matters decided on 31st July, 1999, wherein after taking into consideration the judgment of tax apex Court in Stonecraft Engerprises vs. CIT (1999) 153 CTR (SC) 86 : (1999) 237 ITR 131 (SC), 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 s. 80HHC. Following the said decision we are of the view that the Tribunal was right in law in allowing deduction under s. 80HHC in respect of export of granites. Accordingly, the references are answered in favour of the assessee and against the Revenue. Sri. M.V. Seshachala, learned counsel is permitted to file memo of appearance within two weeks.

[Citation : 250 ITR 595]