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M.P. Warehousing Corporation Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 28 of 1978
Judge
Reported in[1982]133ITR158(MP)
ActsIncome Tax Act, 1961 - Sections 10(20A), 10(21), 10(22) and 10(29); Warehousing Corporations Act, 1962
AppellantM.P. Warehousing Corporation
RespondentCommissioner of Income-tax
Appellant AdvocateA.K. Chitale, Adv.
Respondent AdvocateS.C. Bagadiya, Adv.
Excerpt:
- indian penal code, 1890.section 306 :[dalveer bhandari & harjit singh bedi,jj] abetment of suicide deceased, a married woman, committed suicide - allegation of abetment of suicide against appellant husband and in-laws - ocular evidence was sketchy - dying declaration recorded by tahsildar completely exonerated all accused in-laws of any misconduct dispelling any suspicion as to their involvement - letter of threat allegedly written by appellant to father of victim was concocted piece of evidence held, though presumption against appellant can be raised, it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. .....for its opinion.3. shri chitale, learned counsel for the assessee, contended that the clause 'income derived from... facilitating the marketing of commodities', occurring in section 10(29) of the act, was wide enough to include receipt of commission charges for loading and unloading, and interest received from banks by the assessee. it was urged that the tribunal erred in holding that the provisions of clause (29) of section 10 of the act were attracted only when income was derived from the letting of godowns or warehouses. learned counsel for the assessee relied on the decision in u. p. stale warehousing corporation v. no : [1974]94itr129(all) . in reply, shri bagadiya, learned counsel for the department, urged that income derived by way of commission charges by the assessee or.....
Judgment:

Sohani, J.

1. By this reference under Section 256(1) of the I.T. Act, 1961, hereinafter called 'the Act,' the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :

'(1) Whether, on the facts and in the circumstances of the case, the Tribunal correctly stated the ratio of the decision in : [1974]94ITR129(All) (U. P. State Warehousing Corporation v. ITO) and was justified in holding that the commission received for handling the goods is not the business income and was not exempt under Section 10(29) ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the interest received from the banks on deposits of moneys held in the course of its business was not incidental or consequential to the activities of the business and was taxable under the head 'Income from other sources' and thus not exempt under Section 10(29) ?'

2. The material facts giving rise to this reference briefly are as follows : The assessee is a corporation established under the provisions of the Warehousing Corporations Act, 1962. For the assessment years 1972-73 an4 1973-74, the assessee had received commission charges for handling the work of loading and unloading of agricultural commodities from the Fertilizer Corporation of India and the Food Corporation of India. The assessee had also received interest on deposits with the banks. Exemption was claimed under Section 10(29) of the Act for the amount of interest and commission charges received by the assessee. The ITO rejected the claim. On appeal, the AAC and, on further appeal, the Tribunal upheld the order of the ITO in this behalf. Hence, at the instance of the assessee, the Tribunal has referred the aforesaid questions of law to this court for its opinion.

3. Shri Chitale, learned counsel for the assessee, contended that the clause 'income derived from... facilitating the marketing of commodities', occurring in Section 10(29) of the Act, was wide enough to include receipt of commission charges for loading and unloading, and interest received from banks by the assessee. It was urged that the Tribunal erred in holding that the provisions of Clause (29) of Section 10 of the Act were attracted only when income was derived from the letting of godowns or warehouses. Learned counsel for the assessee relied on the decision in U. P. Stale Warehousing Corporation v. no : [1974]94ITR129(All) . In reply, Shri Bagadiya, learned counsel for the department, urged that income derived by way of commission charges by the assessee or income derived by way of interest on fixed deposits could not be held to be income derived from letting of godowns or warehouses by the State Warehousing Corporation, which alone was exempt from taxation under Section 10(29) of the Act.

4. The decision reported in U. P. State Warehousing Corporation v. ITO : [1974]94ITR129(All) dealt with the question as to whether the U. P. State Warehousing Corporation was an authority constituted for the marketing of commodities. That question is not in issue in the instant case. Learned counsel for the parties conceded that the decision in U. P. State Warehousing Corporation v. ITO : [1974]94ITR129(All) has no bearing on the questions involved in the instant case. Hence, the first question referred to this court by the Tribunal should, in our opinion, be refrained to bring out the real controversy between the parties. We, therefore, reframe that question as follows :

'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the commission charges received by the assessee for handling the goods was not exempt under Section 10(29) of the Income-tax Act, 1961 ?'

5. Now, the answer to the aforesaid question depend upon the construction of Section 10(29) of the Act. That provision reads as follows :

'10. Incomes not included in total income,--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-

(29) 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.'

6. It is significant to note that the words 'any income' occurring in Section 10(29) of the Act arc qualified by the words ' derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities '. Learned counsel for the assessee contended that the clause should be read as follows :

' any income derived from the letting of godowns or warehouses for storage, any income derived from processing and any income derived from facilitating the marketing of commodities.'

7. In our opinion, it would not be permissible to introduce words in the provisions of Clause (29). To do so will be to read in the aforesaid clause words which do not occur there. Moreover, all the activities of a body constituted for the marketing of commodities are such which ultimately may be found to facilitate the marketing of commodities. If income derived from every activity of an authority constituted for the marketing of commodities was meant to be exempted under Clause (29), then the said provision would have been enacted as follows :

' any income derived by an authority constituted under any law for the time being in force for the marketing of commodities.'

8. Such a provision would be found in Clauses (20A), (21) and (22) of Section 10 of the Act. A perusal of these clauses would show that only such income as is derived from a particular source is exempted by Clause (29) of Section 10 of the Act. Therefore, 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 that clause. The Tribunal, in our opinion, 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.

9. For all these reasons, our answers to the first question reframed by us and to the second question referred to us by the Tribunal arc in the affirmative and against the assessee. In the circumstances of the case, parties shall bear their own costs of this reference.


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