K.C. Agrawal, C.J. - (1.) THE Income-tax Appellate Tribunal has referred the following question of law under Section 256(1) of the Income-tax Act, 1961, from the assessment years 1974-75 to 1982-83 : "Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in holding in law that the entire gross receipts of the assessee were eligible for exemption under Section 10(29)?"
(2.) THE above question of law is common in all the above numbered references and, therefore, all these references are disposed of by one single order. The brief facts of the case are that the Rajasthan State Warehousing Corporation is constituted under the Warehousing Corporations Act, 1962, promulgated by Parliament. The Corporation is having its income which has been derived from different sources. The facts in respect of the assessment year 1976-77 are taken into consideration for adjudicating the dispute between the parties and to find out the scope of Section 10(29) of the Income-tax Act. The assessee is deriving its income mainly from letting out the warehouses, interest, trading in agricultural products on behalf of the Food Corporation of India and the State Government. It was claimed before the Income-tax Officer that the entire income of the corporation is exempted under Section 10(29) of the Act. The Income-tax Officer came to the conclusion that the income other than the warehousing activities is not exempt and, therefore, exemption cannot be allowed. The various heads under which the income was derived was as under : JUDGEMENT_906_ITR210_1994Html1.htm The provision of Section 10(29) reads as under : "In the case of an authority constituted under any law for the time being in force for the marketing of commodities, any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities." The above provision was inserted by the Finance (No. 2) Act of 1967, with effect from April 1, 1968.
(3.) THE question that the assessee is an authority constituted under any law far the time being in force is concluded by a decision of this court in favour of the assessee in CIT (Addl.) v. Rajasthan State Warehousing Corporation [1987] 167 ITR 694. THE only thing which is to be seen is the interpretation of 'facilitating the marketing of commodities'. THE provisions of Section 10 provide that in computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included and Section 10(29) grants exemption to income which is derived from the letting of godowns or warehouses, for storage, processing or facilitating the marketing of commodities, the income which is so derived from the letting of the godowns or the warehouses is qualified with the words storage, processing or facilitating the marketing of commodities'. Thus, the 'letting of godowns or warehouses' could be for 'storage' or the 'letting of godowns' or 'warehouses' could be 'for processing' or the 'letting of godowns or warehouses' could be 'for facilitating the marketing of commodities.' THE controversy is as to what would be included within the ambit of letting of godowns or warehouses for facilitating the marketing of commodities. The Madhya Pradesh High Court in U. P. Warehousing Corporation v. CIT [1982] 133 ITR 158 has held that in order to claim exemption it must be proved that the income derived by an authority constituted for the marketing of commodities is income which is derived from the letting of godowns or warehouses for the purposes specified in Section 10(29), which are storage, processing or facilitating the marketing of commodities. If the letting of godowns or warehouses is for any other purpose, or if income is derived from any other source, then such income is not exempt under the clause. In this case the dispute was with regard to the interest received from the bank on deposits of moneys held in the course of business of the corporation and commission received for handling the work of loading and unloading of goods. The High Court has held that the Tribunal was justified in holding that the income derived by the assessee from the handling of goods or from the banks by way of interest was not covered by Section 10(29) of the Act. In M. P. State Warehousing Corporation v. CIT [1984] 145 ITR 420 (MP), the dispute was with regard to the commission received from handling of goods and the interest received from the banks on the deposits of moneys. Relying on, the earlier decision, the said source of income was held not covered under Section 10(29) of the Act. ;