TaxTMI 
TaxTMI 
2015 (3) TMI 20
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....processed minerals" under Schedule XII, when the Schedule specifically mentions the said minerals should be pulverized and micronised? T.C.(A)Nos.2306 2307 and 396 of 2006: "1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that exporter of manually washed/chipped quartz and feldspar is eligible for the deduction under Section 80HHC? 2. Whether in the facts and circumstances of the case activity of manual washing/chipping of quartz and feldspar would fall under sl.x of 12th sch for the purpose of deduction under Section 80 HHC?" 2. The brief facts, common to all the above Tax Case (Appeals) are as follows: The assessment involved in the above Tax Case (Appeals) are for the assessment years 1991-92, 1992-93, 1994-95, 1996-97, 1997-98, 1998-99 and 2001-2002 respectively. The assessee is an exporter of ores, quartz, feldspar, etc. He claimed deduction under Section 80HHC of the Income Tax Act in respect of profits retained for export business. The Assessing Officer, while completing the assessment under Section 143(3) of the Income Tax Act denied the benefit as claimed by the assessee and the reasons given by the Asse....
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....d then loaded straight away for export, quartz and feldspar are not exported in the mined form. As such the assessee claimed that it is a partially processed by manual. It was also stated by the assessee that other minerals are sampled for the chemical commodities whereas quartz and feldspar are analysed for the size, selection and purity apart from chemical content. It is also stated by the representative that the existing firm is an exporter of processed minerals falling under item No.(i) to (x) of twelfth schedule and clauses a,e and g of the said explanation to the said schedule are allowable for deduction u/s.80HHC(2)(b)(ii) Basically there are two questions to be answered an order to allow assessee's claim of deduction under sec.80HHC. i) whether there is any processing ii) whether the provisions contained in Twelfth schedule will apply to the assessee's case. Merely because the assessee washes, chippers and washes the stone manually, it cannot be considered as 'processing' because Twelfth schedule stipulates that there should be pulverishing or micronising of Quartz and feldspar. These activities are not carried on by the ass....
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....polished granite also as qualified items. Quartz and feldspar are minerals (vide Chambers 20th Century Dictionary). Quartz and fledspare exported here are cut from quarries and polished. Therefore, the items would certainly come under item (x) of the Twelfth Schedule. Once this condition is held to be satisfied, what is to be examined is whether this can be called processed minerals as per requirement of section 80HHC(2)(b) read with Twelfth Schedule of the I.T.Act. As per clause (i) of Explanation to the Twelfth schedule process means cutting and polishing. There is no requirement that this has to be done with the help of machinery or power. Thus, considering the totality of the facts and circumstances of the case, I am of the opinion that the appellant, during the relevant accounting period, was engaged in the export of goods and merchandise qualifying for deduction u/s. 80HHC. Thus, it will be entitled to a deduction of Rs. 86,09,977 u/s. 80HHC of the Act for the said year. I direct accordingly." 4. Being aggrieved by the order of the Commissioner of Income Tax (Appeals), the Revenue pursued the matter before the Income Tax ....
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.... ore. (ii) Processed or activatedbentonite, diatomious earth, fullers earth. (iii) Processedkaoline (china clay), whiting, calcium carbonate. (iv) Beneficated-chromite, flourspar, graphite, vermiculite, ilmenite, brown ilmenite (lencoxene) rutile, monazite and other mineral concentrates. (v) Mica blocks, mica splittings, mica condenser films, mica powder, micanite, silvered mica, punched mica, mica paper, mica tapes, mica flakes. (vi) Exfoliated-vermiculite, calcined kyanite, magnesite, calcined magnesite, calcined alumina. (vii) Sized iron ore processed by mechanical screening or crushing and screening through dry process or mechanical crushing, screening, washing and classification through wet process. (viii) Iron ore concentrates processed through crushing, grinding or magnetic separation. (ix) Agglomerated iron ore. (x) Cut and polished minerals and rocks including cut and polished granite. Explanation.For the purposes of this Schedule, processed, in relation to any mineral or ore, means (a) dressing through mechanical means to obtain concentrates after removal of gangue and unwanted deleterious substances or through other means without altering the minerological ....