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TMI Blog2002 (10) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... and its legal implications. 4. The admitted facts relating to the issue are that the assessee during the course of its business for the period under consideration has stated to have exported granite and it claimed deduction under section 80HHC on the value of the granite exported and the same was denied by the Assessing Officer. Hence the assessee filed an appeal before the CIT (Appeals) on this issue among other issues. The CIT (Appeals) has confirmed the disallowance made by the Assessing Officer on this issue basing on the decision in I.T.A. No. 448/85-86 relating to the assessment year 1983-84 in the case of the very same assessee. The department filed appeal against the impugned order aggrieved by the deletion of the disallowances ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the materials placed before the Tribunal and analysing the same in the light of the arguments advanced on behalf of both the parties we have examined section 80RRC of the Act. Section 80RRC contemplates deduction in respect of profits retained for export business. In clause (b) of sub-section (2) of section 80RRC it is categorically stated that this section does not apply to mineral oil and minerals and ores other than processed minerals and ores specified in the Twelfth Schedule. The Central Board of Direct Taxes has issued circular No. 693 dated 17-11-1994 to the effect that the granite which was not cut and polished is not entitled to special deduction under section 80RRC of the Act. The CBDT has also issued subsequent circular No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80RRC of the Act. The Act does not prescribe the degree or extent of cutting and polishing to be applied to granite ores or boulders. Any process applied to the rough mineral which adds value to the marketable commodity would create an eligibility for deduction. The C.B.D.T. in its circular No. 693 dated 17-11-1994 says that for availing of the benefit under section 80RRC, it is necessary that the rock is not only cut into blocks but also polished before it is exported. This circular is in line with Government's policy to encourage export of polished granite and other rocks where value addition before export is high and to discourage export of raw blocks where value addition is low. Subsequently, the CBDT in Circular No. 729 date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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