R.V.Raveendran, J.

1. THE petitioner is an exporter of cut and dressed granite (unpolished). According to petitioner, it selects and marks the quarrying area/rock, cuts the rock by burner/bore cutting, drills holes and after blasting, removes the blocks and exports the granite in an unpolished condition. In regard to the asst. yr. 1993-94, petitioner filed a return claiming deduction of the profit derived by the export of such unpolished granite from the total income under s. 80HHC of the IT Act, 1961 ('Act' for short). Petitioner contended that the material so exported is 'rock' falling under Item (x) of the Twelfth Schedule to the Act and thus the benefit of deduction under s. 80HHC was available. In response to the said return, the Assessing Officer (AO) (fourth respondent) sent an intimation dt. 31st March, 1995 (Annexure C) under s. 143(1)(a) of the Act regarding the total income, tax and interest payable by the petitioner, disallowing the deduction claimed under s. 80HHC. In the Adjustment Explanatory Sheet, attached to the said intimation, the following reason is given for the disallowance of the deduction claimed under s. 80HHC :

"80HHC is not allowed, as assessee