Dipak Kumar Sen, J. - (1.) M/s. Singhal Brothers Private Ltd., the asses-see, is a private limited company. It was incorporated in 1939 under the Indian Companies Act, 1913. Till 1967, it was carrying on business of manufacture and sale of edible oils and owned a factory and godowns at Ghaziabad in U.P.
(2.) In 1967, the directors of the assessee decided to discontinue manufacture and to cease all ancillary business operations. The only income of the assessee thereafter was rent derived from letting out its godowns at Ghaziabad. In the assessment years 1971-72 and 1972-73, the corresponding previous years ending on the 31st March of 1970 and 1971, the assessee claimed exemption under s. 10(29) of the I.T. Act, 1961, in respect of its rental income as aforesaid. The ITO rejected the claim on the ground that the assessee had not been constituted under any specific enactment for marketing of commodities.
(3.) Being aggrieved, the assessee preferred appeals to the AAC who upheld the decision of the ITO. A decision of the Allahabad High Court in U. P. State Warehousing Corporation v, ITO cited was distinguished on facts and it was held that, even if the assessee was accepted to be an authority constituted under the Companies Act, it was not so constituted for marketing of commodities. Its main object was to carry on the business of manufacture of oil and its other objects in its memorandum were incidental to this main object.;