Law:

Section:

Section 32A of the Income-tax Act, 1961 - Investment allowance - Assessment year 1988-89 - Assessee-company was doing business of mining and quarrying of granite stones and exporting them as finished goods to various countries - Assessing Officer denied assessee's claim for investment allowance on ground that no processing or manufacturing activity was involved in process of mining and exporting granite block - Whether assessee was not entitled to investment allowance in view of decision of same High Court in CIT v. Gomatesh Granites [2000] 246 ITR 737 - Held, yes Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 1988-89 - Assessee-company was doing business of mining and quarrying of granite stones and exporting them as finished goods to various countries - Assessing Officer denied assessee's claim for deduction under section 80HHC on ground that product exported was mineral and did not qualify for deduction under section 80HHC(2)(b)(ii) - Whether amendment of section 80HHC(2)(b)(ii) by Finance (No. 2) Act, 1961 was retrospective in nature - Held, no - Whether, therefore, assessee was entitled to relief under section 80HHC - Held, no Circulars and notifications - CBDT Circular No. 693, dated 17-11-1994 - CBDT Circular No. 729, dated 1-11-1995 Interpretation of statutes - Relevance of legislative intention - Retrospective operation FACTS The assessee-company was doing business of mining and quarrying of granite stones and exporting them as finished goods to various countries. Before exporting granite stones as per specifications of customers, the stone had undergo the various types of manual and machinery processes. The Assessing Officer denied assessee's claim for investment allowance on ground that assessee's business was that of exporting raw granite blocks and no processing or manufacturing activity was involved in the process of mining and exporting granite blocks. The Assessing Officer also denied assessee's claim for deduction under section 80HHC on the ground that the product was a kind of mineral which did not qualify for deduction under the section. On appeal, the Commissioner (Appeals) allowed both deductions. On…

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