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TMI Blog1990 (6) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,542 and Rs. 32,882 respectively for the assessment years 1984-85 and 1985-86. The learned Commissioner of Income-tax, Andhra Pradesh-I, Hyderabad felt that clause (b) of section 80HHC(2) included minerals and ores and the assessee dealt in essence with minerals and, therefore, the deduction specified under section 80HHC would not be available. The assessee filed its objection based on the definition of ' mineral ' in Oxford Dictionary. The learned Commissioner referred to the definition of the word ' granite ' as given in the Oxford dictionary and came to the conclusion that granite is essentially a mineral and since the assessee dealt with granite stones held that the deduction under section 80HHC was erroneously allowed to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the book on Custom Levy, Valuation and Classification by Taraporewals. Thus granite in which the assessee dealt with cannot be termed as a mineral but has to be considered as it is considered in the mercantile world as forming part of a different and distinct commodity as they have been cut to different sizes, polished and are sold -- exported mostly as memorials. Shri Kailasnath, the learned departmental representative took us through the orders of the learned Commissioner of Income-tax and relied on the same. 4. Having regard to the rival submissions and the materials on record, we set aside the order of the learned Commissioner of Income-tax on this issue. Certain deductions in respect of export turnover are allowed from the profits of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erals. Thus he came to the conclusion that granite stone in essence is mineral and in terms of section 80HHC(2)(b), the assessee is not entitled to any deduction in respect of its export turnover. 5. In our considered opinion, words in a section are not to be interpreted by having those words in one hand and the dictionary in the other hand. 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 purposes they are intended to serve as has been laid down in CGT v. N.S. Getti Chettiar [1971] 82 ITR 599 at 605-6 (SC). It has been repeatedly held in cases relating to tax on sales that undefined words and expressions must be construed in the sense in which they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was exporting mineral. The application for cash compensatory support on exports made by registered exporters in Form III speaks of the product of the assessee as cut and polished granite memorials. Appendix 16 of Import and Export Policy (April 1985 -- March 1988) Vol. 1, published by the Government of India, Ministry of Commerce, deals with select list of Export Products. Sub-heading 7 deals with handicrafts and 7.2 deals with cut and polished granite whereas " minor minerals and ores -- processed " come under a different classification under sub-heading 8 under the caption Miscellaneous. Again Annexure I to Appendix 23 which deals with illustrative list of products which would be eligible for special facilities on grounds of 100% ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India's Import and Export policy or by the Trade. There is dispute about the eligibility of the assessee for 80HHC deduction but for the issue discussed above. In the light of our discussion, we hold that the assessee is entitled to deduction under section 80HHC and the order of the Income-tax Officer did not suffer from any error resulting in any prejudice to the revenue. For these reasons we set aside the order of the learned Commissioner on this issue. 7. The second point at dispute for assessment year 1984-85 is about the direction of the Commissioner of Income-tax at para 8 of his order. Certain details for expenditure incurred on foreign customers were filed for the first time before the Commissioner of Income-tax in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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