- (1.) This appeal under Section 260A of the Income-tax Act, 1961 ( Act ) is at the instance of an assessee and is directed against an order dated April 7, 2003 passed by the Income-tax Appellate Tribunal, B Bench, Kolkata in ITA No.698/Cal/1995 for the Assessment Year 1990-91 and thereby dismissing the appeal filed by the appellant.
(2.) Being dissatisfied, the assessee has come up with the present appeal.
(3.) The facts giving rise to filing of the present appeal may be summarized thus: a) The appellant is a private liability company within the meaning of the Companies Act, 1956 and is regularly assessed to tax under the Income-tax Act, 1961 and the present appeal arises out of the assessment of the appellant for the Assessment Year 1990-91 for which the relevant previous year was the financial year ending on March 31, 1990. b) The appellant carries on business of manufacturing various Mica products from raw mica obtained from mines. c) Mica obtained from the mines is subjected to several operations, such as, disintegration, washing, drying and removal of the alien and scissors to obtain specific sizes. Further process is undertaken to differentiate between different qualities and to obtain different thickness. d) The fabricated mica parts, depending upon the requirement of the buyers, are coated with silver paste by the process of screen printing. The printing machine is also filled with a small furnace for the purpose of drying the Silvered Mica parts. Such silvered mica parts are subjected to further drying in a bigger furnace at high temperature. e) The appellant also manufactures Mica flakes by pulverizing selected mica pieces. Flakes are manufactured in different mesh specifications depending upon the buyers requirements and are used in the manufacture of pearlescent pigment. f) According to the appellant, the fabricated Mica parts, silvered mica parts, micanite sheets and mica flakes manufactured out of processed mica are treated as distinct commercial commodities different from the raw mica obtained from the mines. g) During the material period, the appellant exported fabricated mica electronic components pursuant to the orders received from foreign customers. The appellant was registered with the Engineering Export Promotion Council as a manufacturer and exporter of fabricated mica parts. h) In respect of the fabricated mica electronic components exported by it, the appellant claimed deduction under Section 80HHC of the Act and in the assessment made under Section 143(3) of the Act for the Assessment Year 1990-91, the Assessing Officer allowed the claim of the appellant under Section 80HHC in respect of the fabricated mica electronic components exported to other countries. i) The Commissioner of Income-tax, however, issued a notice dated December 21, 1994 proposing to revise the said assessment by directing the Assessing Officer to withdraw the deduction allowed under Section 80HHC, since according to him, the processed minerals endorse were excluded from the purview of Section 80HHC for the Assessment Year 1990-91. j) The appellant filed detailed reply along with various enclosures thereby contending that the appellant exported mica products which were held as distinct commercial commodities different from the mineral mica obtained from the mines. k) The Commissioner of Income-tax, however, by an order dated January 31, 1995 held that processed mica was not covered by Section 80HHC prior to the Assessment Year 1991-92 and directed the Assessing Officer to withdraw the deduction granted under the said section. l) Being dissatisfied, the appellant preferred an appeal before the Income-tax Appellate Tribunal, where there was a difference of opinion between the members who heard the appellant s appeal. The Accountant Member was of the view that the appellant was entitled to deduction under Section 80HHC as valued products exported by the appellant were not mineral as such. The learned Judicial Member, however, was of the view that by virtue of amendment made by Finance Act, 1991, the appellant s products were not covered by Section 80HHC during the Assessment Year 1990-91. As a result, the matter was referred to a Third Member who by an order dated March 31, 2003 agreed with the view taken by the Judicial Member and subsequently, by an order dated April 7, 2003 the Division Bench of the Tribunal dismissed the appeal filed by the appellant in view of the majority view.;