LexSTONECRAFT ENTERPRISES versus COMMISSIONER OF INCOME TAX
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
STONECRAFT ENTERPRISES
A .
v.
COMMISSIONER OF INCOME TAX
MARCH 18, 1999
"
B
[S.P. BHARUCHA AND R.C. LAHOTI, JJ.]
Income Tax Act, 1961 :
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Section 80HHC (2)(b)-Export of 'granite '-Deduction on the profits
earned from export of goods-Exclusion of goods which were "mineral oil", c
''minerals'' and ''ores' '-Central Board of Direct Taxes issuing circular stating
-.
that value added granite eligible for deduction-No proof of granite exported
by assessee suhjected to any process-Claim for deduction-Entitlement of-
Held, ''Granite'' is a ''mineral under the provision of Section BOHHC (2)(b)-
Thus, assessee not entitled.to claim benefit of deduction thereunder.
D
interpretation of statutes :
Doctrine-Nmscitur sociis-Applicability of
Words and Phrases:
E
''Mineral (it'', ''Minerals'', ''Ores' '-Meaning and scope of in the
context of Section 80HHC (2)(b) of the Income Tax Act, 1961.
Appellant-assessee, was engaged in exporting 'granite'. Under Section
80HHC of the Income Tax Act, 1961, an assessee engaged in the business
F
of export of any goods or merchandise was entitled to deduction on the profits
gained. However, under Sub-section (2)(d) of the said Section, deduction was
not available to mineral oil and minerals and ores. Assessee's claim for
deduction was rejected by the Tribunal holdin~ that 'granite' was 'mineral'
within the meaning of the term under Section 80HHC (2){b) of the Act.
Aggrieved, appellant has filed the present appeal.
G
~
The appellant-assessee contended that while granite was a mineral in
general sense, it was not a mineral for purposes of Section 80HHC of the
Act and therefore, the deductions provided therein were available to it; the
Circular issued by the Central Board of Direct Taxes, states that while
granite alone can be considered as a mineral, any process applied to granite H
17
18
SUPREME COURT REPORTS
[1999] 2 S.C.R.
A would deprive the quality of rough minerals from the dimensional blocks of
granite, which was a value added marketable commodity; therefore, profits
derived from export of granite dimensional blocks would be eligible for
deduction under Section 80HHC of the Act; in view of the doctrine of noscitur
a sociis, the word 'minerals' in Section 80HHC should have been read in the
B
context of the word 'ores' with which it was associated and must draw colour
therefrom; that is to say, it must read as referring only to such minerals
as are extracted from ores and not others, thus excluding granite.
Dismissing the appeals, this Court
C
HELD : 1.1. 'Granite' is a mineral covered under the provisions of sub-
section 2(b) of Section 80HHC of Income Tax Act, 1961 and appellant-
assessee is not entitled to claim benefit of deduction provided thereunder.
[20-D]
1.2. The doctrine of noscitur a sociis is applicable. The word "minerals"
D in· Sub-section 2(b) of S. 80HHC must be read in the context of "mineral oil"
and. "ares" with which it is associated. These words taken together are
intended to encompass all that may be extracted from the earth. All minerals
extracted from the earth, granite included, must, therefore, be held to be
covered by the provisions of Sub-section (b) of Section 80HHC, and the
E exporter is, therefore, disentitled to the benefit of that Section. [21-C-D]
F
G
The State of Mysore v. Swamy Satyanand Saraswati (dead) by his lrs.
AIR, [1971) SC 1569; Banarsi Dass Chadha & Bros. v. Lt. Governor Delhi
Administration & Ors., [1979] 1 SCR 271 and Pardeep Aggarbatti, Ludhiana
v. State of Punjab & Ors., [1997] 8 SCC 511, referred to.
Halsbury Laws of England, referred to.
2. There is nothing on record to indicate that what the assessee
exports is value added granite.The assessee thus, cannot derive any assistance
from the circular issued by the Central Board of Direct Taxes.
[20-CJ
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 144-146 of
1994.
From the Judgment and Order dated 28.7.93 of the Kamataka High Court
H in LT.R.C. Nos. 134-l36ofl992.
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STONECRAFT ENTERPRISES v.C.l.T. lBHARUCHA, J.]
19
A.K. Ganguli and M.T. George for the Appellant.
A
V. Gaurishanker and S. Rajappa for the Respondent
The Judgment of the Court was delivered by
BHARUCHA, J. We are concerned in these appeals with the Assessment B
Years 1985-86, 1987-88 and 1988-89. Two questions are before us but it is
apparent that the question really to be answered is the first one. The questions
read thus :
"l. Whether, on the Excerpt shown. Read the full judgment & AI analysis in Lexace.