Rajasthan High Court - Jaipur
Additional Commissioner Of Income-Tax vs Rajasthan State Warehousing ... on 11 April, 1986
Equivalent citations: 1986(2)WLN201
JUDGMENT M.C. Jain, J.
1. The Income-tax Appellate Tribunal, Jaipur Bench, has made this reference on Reference Applications Nos. 85 and 86/JP/1974-75, arising out of ITA Nos. 719 and 720/JP/1972-73, in respect of the assessment years 1969-70 and 1970-71, on the following questions of law :
" 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee corporation was an authority constituted under any law for the marketing of commodities ; and
2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income of the corporation from letting of godowns and/or warehousing was exempt from tax under Section 10(29) of the Income-tax Act, 1961. "
2. The Income-tax Officer was of the view that the assessee is not entitled to exemption under Section 10(29) of the Income-tax Act, 1961, and, therefore he added the income from letting of godowns and/or warehouses, in respect of the assessment years 1969-70 and 1970-71. The assessee went in appeal before the Appellate Assistant Commissioner and the Appellate Assistant Commissioner allowed the appeals and held that the assessee was entitled to exemption under Section 10(29) in respect of the income arising from letting of godowns and/or warehouses. The matter was taken up before the Income-tax Appellate Tribunal by the Department and the Tribunal upheld the view of the Appellate Assistant Commissioner, whereon reference applications were made on behalf of the Revenue before the Tribunal.
3. At the very outset, it may be stated that there have been decisions of various High Courts on the point which we have been called upon to answer. Five High Courts, namely, Allahabad, Punjab and Haryana, Gujarat, Karnataka and Delhi have taken the view that warehousing corporations constituted under the Warehousing Corporations Act, whether Central or State, are authorities constituted under the Warehousing Corporations Act for marketing of commodities and their income from letting of godowns and warehouses would be exempt under Section 10(29) of the Income-tax Act. These decisions are U.P. State Warehousing Corporation v. ITO [1974] 94 ITR 129 (All), CIT v. Haryana Warehousing Corporation [1978] 112 ITR 374 (P & H), Addl. CIT v. Karnataka State Warehousing Corporation [1980] 125 ITR 136 (Kar), CIT v. Gujarat State Warehousing Corporation [1980] 124 ITR 282 (Guj)and CIT v. Central Warehousing Corporation [1985] 156 ITR 407 (Delhi).
4. On behalf of the Revenue, reliance has been placed on two decisions of the Calcutta High Court, which are reported in Calcutta State Transport Corporation v. CIT [1977] 108 ITR 922 and Singal Brothers P. Ltd. v. CIT[1980] 124 ITR 147.
5. The main controversy arising in these matters centres round the expression "authority" under Section 10(29). What is required for the applicability of the provisions of Section 10(29) is that it should be a body constituted under some law and it should come into existence for the marketing of commodities. If the body is constituted under the law with such an object, then it would be an authority constituted under the law to which Section 10(29) would apply. The expression "authority constituted for the purpose of marketing of commodities" has been considered by the High Courts referred to above other than Calcutta and we need not make a further probe into the matter and deal with the question ourselves. We are in respectful agreement with the view taken by the High Courts referred to above. So far as the Calcutta decisions are concerned, both the decisions are clearly distinguishable. They have been considered in the latest decision of the Delhi High Court in CIT v. Central Warehousing Corporation [19-85] 156 ITR 407. Calcutta State Transport Corporation's case [1977] 108 ITR 922 (Cal) was a case wherein the expression "legal authority" was taken into consideration and so far as the second decision of the Calcutta High Court is concerned, it may be stated that that was a case of a joint stock company incorporated under the Companies Act and its primary object was to carry on ordinary business of commercial activity, whereas the assessee corporation in the present case, namely, the Rajasthan State Warehousing Corporation, is constituted under the Warehousing Corporations Act, 1962, promulgated by Parliament, and so the assessse corporation being a body constituted under the Central Act and carrying on the functions and exercising the powers under the Act, is a body which is purely distinguishable from a company incorporated under the Companies Act. Even otherwise, considerations which weighed with the Calcutta High Court in connection with the expression " authority " were different. It may be stated that the other High Courts have taken into consideration the expression "Authority" in a general way. A particular expression may assume a different meaning in a particular context. To us, it appears that when any body is constituted under any law with the object of marketing of commodities, then that body would be an authority and such an authority will be covered by Section 10(29). That body being a statutory corporation exercising the statutory powers and functions would be an authority entitled to claim exemption on income from letting of godowns and/or warehouses.
6. We accordingly answer the two questions in favour of the assessee and against the Revenue and hold that the Tribunal was justified in holding that the assessee corporation is an authority constituted under the Warehousing Corporations Act for the marketing of commodities and its income from letting out godowns is exempt from tax under Section 10(29) of the Act.
7. Parties shall bear their own costs.