9911796707
TMI Blog2015 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the Assessing Officer does not appear to be correct. The Assessing Authority misconstrued the 12th Schedule and the Explanation to deny the benefit of deduction under Section 80HHC only on the wrong premise that Feldspar should be exported only in pulverized and micronised form. If such a view is taken, item (x) of 12th Schedule will become redundant and meaningless. The decision of the Supreme Court in the case of Gem Granites V. Commissioner of Income-Tax reported in (2004 (11) TMI 13 - SUPREME Court) relied on by the Revenue does not get attracted to the facts of the present case, as the said case deals with the issue pertaining to the assessment year 1987-88, which is prior to the amendment in 1991. The present cases are after the amendment in the year 1991, wherein in clause (2) (b) (ii) of Section 80HHC of the Income Tax Act, the words 'other than processed minerals and ores specified in the Twelfth Schedule' are inserted. But prior to the amendment in the year 1991, there are no words of restriction 'other than'. - Decided in favour of the assessee - Tax Case (Appeal) Nos.2100 to 2102, 2306, 2307, 396 of 2006 and 232 of 2007 - - - Dated:- 16-2-2015 - The Hono ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form. He rejected the assessee's plea that the goods exported would fall under Serial No.x of the 12th Schedule together with the explanation as a cut and polished mineral. The details of the process as explained by the assessee has been recorded in the assessment order itself. Nevertheless, the Assessing Officer considered the issue on two grounds viz., i) as to whether there was any processing and ii) whether the provisions contained in 12th Schedule would apply to the assessee's case. The Assessing Officer came to the conclusion that the various methods of processing undertaken by the assessee did not qualify for the benefit of Section 80HHC primarily on the ground that Feldspar should be exported in the pulverized and micronised form in terms of Item No.(i) in the 12th Schedule. For better clarity, the reasoning as set out by the Assessing Officer, reads as follows: iii. The assessee has claimed deduction u/s.80HHC to the tune of ₹ 86,09,977/- as per the provisions of sec.80HHC(2)(b). Section 80HHC does not apply to minerals and ores other than the processed minerals and ores as specified in the twelfth schedule. As per 12th Schedule, dealing with pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the year to call it as mechanical process. Moreover, the assessee do not come under clause (i) or (x) of twelfth schedule as claimed by the assessee for the reason i) pulverished or micronised the feldspar, quartz are not exported. ii) secondly the combined activity of cut and polished minerals is not happening in the assessee's case. Just because the name quartz, feldspar appear in twelfth schedule the assessee cannot take it as a advantage to claim relief u/s.80HHC. The word processing appears in twelfth schedule only in term of 2 3 and not in respect or item No:1. Incidentally so long as the assessee did not export pulverished and micronised quartz and feldspar, the assessee is not entitled for the claim u/s.80HHC. Hence the assessee's claim is NEGATIVE and addition on this score works out to ₹ 86,09,977/- which is added to the income returned. 3. On appeal at the instance of the assessee, the Commissioner of Income Tax (Appeals) took the view that it is not in dispute that the assessee did not export Feldspar in pulverized or micronised form, but the nature of goods exported would fall under the definition as a mineral and it would satisfy th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that item (i) of 12th Schedule directly deals with quartz and feldspar and therefore item (x) of the 12th schedule could not be applied. He further submitted that when the 12th Schedule specifically provides that Feldspar should be pulverized and micronised, the assessee is not entitled to the benefit of Section 80HHC, since the assessee only washes, chippers and washes the stone manually, which did not involve any processing. Hence, the Assessing Officer is correct in denying the benefit under Section 80HHC of the Income Tax Act. 7. Per contra, learned counsel appearing for the assessee submitted that as per item x of the 12th schedule, which mentions cut and polished minerals and rocks including cut and polished granite are qualified for benefit under Section 80HHC. Quartz and feldspar, which are minerals and cut from quarries and polished also qualify for deduction under Section 80HHC. As per clause (i) of Explanation to 12th Schedule, process means cut and polishing. Hence, the Tribunal is correct in granting the benefit to the assessee. 8. Heard learned Standing Counsel appearing for the Revenue and the learned counsel appearing for the assessee and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or filtration. 10. It is not in dispute that Feldspar is a mineral. The question is whether Feldspar would be a processed mineral, only if it is pulverized and micronised. If the answer to this is not in the affirmative, then the assessee's case can be accepted. If the Department's contention that Feldspar, if pulverized and micronised alone are entitled to the benefit of deduction under Section 80HHC, is accepted, then the Department has a ground to pursue these appeals. 11. Section 80HHC(2)(b)(ii) of the Income Tax Act excludes minerals and ores other than processed minerals and ores specified in the 12th Schedule. In the 12th Schedule, processed minerals and ores, items (i) to (ix) are specific insofar as different varieties of minerals and ores are concerned. However, in general terms, item (x) provides cut and polished minerals also subject to processing as defined under explanation, are eligible for deduction. 12. In the present case, feldspar is not in pulverized and micronised form, but is exported as cut and polished mineral. This fact is not in dispute. The main point is whether Feldspar while cutting and polishing undergoes any one of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
