- (1.) Following questions of law have been ref erred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh, arising out of its order dated 1-1-1998 passed in ITA No. 3342 (Delhi)/97 in respect of assessment year 1994-95: 1. Whether in the f acts and circumstances of the case the Income Tax Appellate Tribunal was justified in law in holding that income of Rs. 10,05,38,502 from procurement of wheat as an agent of the Government is not exempt under Section 10(29) of the Income Tax Act.
(2.) Whether Income Tax Appellate Tribunal was justified in law in upholding the disallowance of Guest House rent amounting to Rs. 39,000. The assessee is a Government undertaking. It is constituted under are housing Corporation Act, 1962, a Central Act. The functions of the Corporation are to build godowns and warehouses for storage of agricultural produce and fertilizer etc. and to act as an agent of the Government and Central Warehousing Corporation for purchase, sale, storage and distribution of agricultural produce, fertilizer and agricultural implements etc. During the year the Corporation, acting as an agent of Government, purchased wheat on its behalf. The Corporation was paid incidental charges for the purchase and storage of wheat. The Corporation claimed that its entire income is exempt under Section 10(29) of the Income Tax Act, 1961 (for short, "the Act") Exemption under Section 10(29) of the Act was being allowed to the Corporation on its entire income, including income from procurement of wheat up to assessment year 1991-92. For the first time, in the assessment year 1992-93, the exemption to income from wheat as an agent of the Government was denied.
(3.) Following the orders for assessment year 1992-93, the assessing officer disallowed exemption to income of Rs. 10,05,38,502 from procurement of wheat in this year, i.e., assessment year 1994-95. On appeal filed by the assessee, it was upheld by the Commissioner (Appeals) and on further appeal, the Tribunal, following its order for assessment year 1992-93, sustained the levy of tax.;