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TMI Blog2013 (6) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... court framed the following substantial question of law under section 260A of the Act: "Whether, in the facts and in the circumstances of the case as well as in the law, the learned Tribunal was justified in directing to allow deduction under section 80HHC on export of marble blocks which were not polished as required, vide item (x) of the Twelfth Schedule and ignoring the fact that there was no value addition in terms of cost of exported blocks as required in Circular No. 693, dated November 17, 1994 ?" The learned counsel for the appellant-Revenue, Mr. K. K. Bissa, sub-mitted that the marble blocks, which were exported by the assessees, were not "polished" as required by the Twelfth Schedule and there was no value addition in terms of cost of exported blocks. He further submitted that the assessees are not entitled to deduction under section 80HHC of the Act. On the other hand, learned counsel for assessee-respondents submitted that the exported marble blocks were cut and polished and were eligible for deductions permissible under section 80HHC of the Act. In support of their claim, the assessees had submitted office copies of invoices/vouchers/certificates for showing that cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefication by mechanical crushing and screening through dry process ; (g) sizing by crushing, screening, washing and classification through wet process ; (h) other upgrading techniques such as removal of impurities, through chemical treatment, refining by gravity separation, bleaching, floatation or filtration." Circular No. 693, dated November 17, 1994, reads as under (see [1995] 211 ITR (St.) 25) : "Circular No. 693, dated November 17, 1994 Sub : Benefit of section 80HHC for export of processed minerals-Clarification regarding export of cut and polished dimensional blocks, granite or other rocks. Section 80HHC of the Income-tax Act allows a deduction from the gross total income of the entire profits derived from export of goods other than minerals. Finance (No. 2) Act, 1991 extended the benefit to export of processed minerals and ores mentioned in the Twelfth Schedule to the Income-tax Act. Item (x) of the Schedule mentions 'cut and polished minerals and rocks including cut and polished granite'. 2. Some organisations and individual taxpayers have raised doubts whether the deduction under section 80HHC is available in respect of export of granite or other rocks that are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by them and hence it is required that the final cutting of the granite blocks would have to be taken at their end. The same consideration would apply to the final polishing. The extent of final polishing required to granite blocks would depend on their actual use." In the present case, the assessing authority has disallowed the benefit of deduction under section 80HHC of the Act by observing that the bills raised by the assessees used the term "dressed marble blocks" and in reality, the blocks were neither cut in uniform dimensional size nor polished. The ultimate cutting and polishing is to be done by the end user, so there is no logic behind the marble blocks cut and polished before export. Thus, a finding was given that the export of the marble blocks by the assessee is not eligible for the deduction under section 80HHC of the Act and the claim of the assessees under section 80HHC of the Act was disallowed. The Commissioner of Income-tax (Appeals) allowed the appeals of the assessees by observing that as the marble is a mineral, cut and polished marble blocks shall be covered by entry (x) in the Twelfth Schedule, the assessees have filed copies of invoices, certificates, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r undergoing the process of cutting and polishing, export of marble blocks fetched profit at higher rate, which is clearly high value addition and, hence, the benefit of deduction under section 80HHC of the Act during the relevant assessment years claimed by the assessees cannot be denied in view of the decision of the Karnataka High Court in CIT v. God Granites [1999] 240 ITR 343 (Karn), which has also been affirmed by the hon'ble apex court in CIT v. God Granites [2003] 262 ITR 567 (SC). Learned counsel for the assessee-respondents also submitted that the High Court cannot go into questions of facts of the case and the appellant Revenue has not taken the contention that the findings arrived at by the learned Tribunal on facts was perverse. In support of their contention, learned counsel relied on the decision of the hon'ble apex court in the case of Sudarshan Silks and Sarees v. CIT [2008] 300 ITR 205 (SC), in which it was held as follows (headnote) : "Reversing the decision of the High Court, that the final fact finding authority was the Appellate Tribunal and its decision on the facts could be gone into by the High Court only if a question had been referred on whether the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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