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TMI Blog1987 (9) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee without granting any deduction under the said section with reference to the export of rice by the assessee. The first objection taken by the assessee's counsel before the Tribunal was regarding this exercise of power by the Commissioner on the ground that the Commissioner could not exercise this power because the order was passed by the ITO under the direction of the IAC relying on the Special Bench decision of the Tribunal in the case of East Coast Marine Products (P.) Ltd. v. ITO [1983] 4 ITD 73 (Hyd.). Further submission was also made that since the order was passed under the direction of the IAC it was not erroneous. According to the assessee's counsel, the order passed under the compulsion could not be said to be erroneou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book on Income-tax Law, Vol. 1, P. 83, Note 14, the contention was that it was the law in force on the first day of the assessment year which was applicable and not a new provision which came into force in the middle of that assessment year. Further, it was submitted that the Explanation did not have any retrospective effect. Although it began with the words "for the removal of doubts" it was not clarificatory in nature relying upon the Tribunal's decision Bombay Bench 'A' in International Commuters Indian Mfg. Ltd. [IT Appeal Nos. 6466 (Bom.) of 1983, dated 19-3-1987] it was argued that if the Explanation was inserted to remove doubts why was the doubt to be removed only from 1-10-1984 ? 3. Regarding the merits of the assessee's claim, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amund Kissan Co-operative Rice Milk Marketing Society Ltd. [1976] 103 ITR 499 (MP), and (iii) V. B. Raghurama Shetty 47 STC 369 (SC). It was submitted that rice milling was an industry because Central Govt. Act was applicable to it and that therefore, rice was an entirely new and distinct commodity from paddy. The Supreme Court decision in V. B. Raghurama Shetty's case was also relied upon for this purpose. Thus, the entire argument was that rice was produced at the end of all agricultural operations on paddy. It was not an agricultural commodity; since paddy was an agricultural commodity and since rice was not an agricultural commodity and in any case it was not a primary agricultural commodity. 4. The learned Departmental Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trospective, the first few words of the Explanation are abundantly clear. They are, "for the removal of doubts". In view of these words, it cannot be said that the Explanation is not clarificatory. If it is for the removal of doubts, then, it cannot be anything, but clarificatory. This is the first reason why it must be said that the Explanation is retrospective in operation. It is true that it has been inserted with effect from 1-10-1984, but that does not mean that it is not retrospective. The fact that it is clarificatory remains very much and the logical conclusion has to be drawn that it is retrospective. What the amendment has done is to insert the Explanation with effect from 1-10-1984. That does not mean that the doubt as sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's case that it cannot be assessed correctly or that he has a vested right in a lower assessment though it may be an erroneous assessment. Therefore, we hold that the Explanation is applicable and the order passed by the Commissioner u/s. 263 was within his jurisdiction. 6. That brings us to the merits of the assessee's claim. On a consideration of the authorities cited before us, we are of the view that although rice is an agricultural commodity, it cannot be said to be an agricultural primary commodity. In the present case, the assessee has hulled, parboiled and polished the rice. Therefore, not only has the rice been separated from the chaff, but it has also been processed by parboiling and polishing. Therefore, it cannot be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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