D.K. Kapur J.
1. The following question has been referred to us by the Income-tax Appellate Tribunal under s. 256(1) of the Income-tax Act, 1961, for the assessment years 1968-69 and 1969-70, which is the subject-matter of these two income-tax references :
'Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the assessed was entitled to exemption under section 10(29) of the Income-tax Act, 1961, in respect of the income derived from the letting out of godowns or warehouses for storage, processing or facilitating the marketing of commodities ?'
2. At the very start of the case, it was brought to our notice that the Board of Direct Taxes had granted exemption to the Central Warehousing Corporation with respect to these types of income but as these are directions which have to be followed by the income-tax authorities and there is a reference of the above question to this court, we have preferred to answer the question even though it may prove to be of academic interest only.
3. At the very start of the discussion, it is necessary to quote s. 10(29) of the Act which is in the following terms :
'10. 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 facilating the marketing of commodities.'
4. This refers to one of the exemptions granted by s. 10. The quotation shows that in the case of an authority constituted by law for the purpose of marketings of commodities, any income derived by the said authority from the letting of godowns or warehouses for storage, processing or facilating the marketing of commodities exempt. A question was raised before us that the assessed was not an authority and, in any event, was not marketing commodities. This point has already been dealt with by four High Courts in respect of State Warehousing Corporation set up under the Warehousing Corporations Act, 1962. The Central Warehousing Corporation was also set up by the same Act and the functions thereof are set out in s. 11 of the said Act. On the other hand, State Warehousing Corporations can be set up by the State Government under the same Act by virtue of s. 18. If set up, their functions are as stated in s. 24. A comparison between ss. 11 and 24 would reveal that the functions of the Central Warehousing Corporation and a State Warehousing Corporation are exactly the same. The only additional function of the Central Warehousing Corporation is that it can subscribe to the share capital of a State Warehousing Corporation. thereforee, essentially, a State Warehousing Corporation is almost identical with the Central Warehousing Corporation which is set up under s. 3 of the aforementioned Act.
5. In the judgments which are U.P. State Warehousing Corporation v. ITO : 94ITR129(All) ; CIT v. Haryana Warehousing Corporation ; Addl. CIT v. Karnataka State Warehousing Corporation : 125ITR136(KAR) and CIT v. Gujarat State Warehousing Corporation : 124ITR282(Guj) , the Allahabad, the Punjab and Haryana, the Karnataka and the Gujarat High Courts have held in respect of State Warehousing Corporations that each is an 'authority' constituted under a law for marketing of commodities and the income derived from letting out their godowns or warehouses for storage, processing or facilating the marketing of commodities is exempt under s. 10(29) of the Income-tax Act, 1961. We have examined the reasoning given is these four judgments and we are not persuaded to differ from the same. We do not set out any extensive reasoning of our own as we adopt the same as given in these judgments.
6. It may be pointed out here that the learned counsel for the Department tried to distinguish these judgments by citing two Calcutta decisions which are reported as Calcutta State Transport Corporation v. CIT : 108ITR922(Cal) and Singhal Brothers (P.) Ltd. v. CIT : 124ITR147(Cal) .
7. In the case of Calcutta State Transport Corporation : 108ITR922(Cal) , the income in question was not derived from any warehousing or letting out of godowns nor was the question one arising under s. 10(29) of the Income-tax Act, 1961. The court reached the decision that the Calcutta State Transport Corporation was not an authority, let alone a 'local authority'. As this decision was based on the interpretation of some other provision, we think it is of no assistance in determining whether the Central Warehousing Corporation is an 'authority'. In the case of Singhlal Brothers (P). Ltd. : 124ITR147(Cal) , the other decision, the court did reach the conclusion that the assessed was not an 'authority' within the meaning of s. 10(29) of the Income-tax Act, 1961. This decision was based on the conclusion that a joint stock company incorporated primarily for carrying on ordinary business or commercial activity under the Companies Act was not an 'authority' within the meaning of s. 10(29) of the Act. This authority is also distinguishable as we are at present dealing with a particular authority constituted by a Central Act for carrying on the functions specified in the Act. This is a Statutory Corporation with statutory functions and we agree with the four judgments cited above to the effect that this is an 'authority'. In fact, for the purpose of art. 12 of the Constitution, the Supreme Court has given numerous decisions regarding similar Corporations being authorities, and we have no doubt that the assessed is an 'authority' for the purpose of Income-tax Act.
8. We accordingly answer the question referred to us in the affirmative in favor of the assessed and against the Department, but leave the parties to bear their own costs.