9911796707
|
Home
Issues: Eligibility of relief claimed under sec. 80HHC for granite export turnover.
The judgment by the Appellate Tribunal ITAT Bangalore involved an appeal by the assessee regarding the eligibility of relief claimed under sec. 80HHC for the assessment years 1987-88 and 1988-89. The primary issue was whether granite, extracted by the assessee and exported to various countries, qualified for deduction under sec. 80HHC. The assessing officer and the Commissioner of Income-tax (Appeals) had denied the relief, citing that granite fell under the category of "minerals" excluded from the deduction as per sub-clause (b)(ii) of sec. 80HHC. The Commissioner (Appeals) contended that the term "minerals" in sub-clause (b)(ii) should be interpreted broadly to include granite, emphasizing that beneficial provisions like sec. 80HHC should be construed liberally to promote export trade. The assessee's representative argued that granite, being a rock, should not be considered a mineral in the context of sec. 80HHC, as it serves a different commercial purpose compared to traditional minerals like gold or silver. The Tribunal analyzed various expert opinions and legal precedents to determine the classification of granite. Geological experts opined that granite, being a rock composed of minerals, should not be classified as a mineral or ore. However, the Tribunal considered the definition of "minerals" in the Law Lexicon and the interpretation provided by the Supreme Court in State of Mysore v. Swamy Satyanand Saraswati, which concluded that granite could be considered a mineral. The Tribunal also referred to the principle of noscitur a sociis to interpret the term "minerals" in sec. 80HHC, emphasizing that the term should be understood in a commercial sense rather than a scientific one. It was highlighted that the method of extraction, whether through mining or quarrying, should not dictate the classification of a substance as a mineral. Ultimately, the Tribunal held that granite should be considered a mineral for the purposes of sec. 80HHC, despite being extracted through quarrying activities. The judgment emphasized adopting a general and broad interpretation of the term "minerals" in the context of the Income-tax Act to allow the deduction claimed under sec. 80HHC for granite export turnover.
|
