Warehousing income exemption is limited to direct letting receipts, with incidental fumigation charges potentially covered.

Section 10(29) exempts only income derived from letting godowns or warehouses for storage, processing or facilitating the marketing of commodities; the qualifying words attach to that source of income and do not extend the exemption to separate business receipts. Procurement charges and bank interest were treated as arising from independent sources and therefore outside the exemption. Fumigation charges collected in the course of storing goods in the godowns were regarded as incidental to the warehousing activity and could qualify. Miscellaneous income was not analysed in sufficient detail and required fresh consideration. The document thus distinguishes direct warehousing income from ancillary or separate receipts for exemption purposes.

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Issues: Whether the assessee's entire receipts, including procurement charges, interest, fumigation charges and miscellaneous income, were exempt under section 10(29) of the Income-tax Act, 1961, as income derived from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities.

Analysis: Section 10(29) grants exemption only to income derived from the letting of godowns or warehouses and the words "for storage, processing or facilitating the marketing of commodities" qualify that source of income. The exemption does not extend to receipts from independent business activities merely because they may be connected with the assessee's warehousing functions or may form part of a broader commercial operation. Procurement receipts and bank interest were held to arise from separate sources and not from the letting of godowns or warehouses. Fumigation charges, to the extent they were collected during the course of storage of goods in the assessee's godowns, were treated as incidental to the exempt warehousing activity. Miscellaneous income was not examined in sufficient detail and required fresh consideration.

Conclusion: The entire income was not exempt under section 10(29); only income directly attributable to letting of godowns or warehouses, including incidental fumigation-related receipts, could qualify, while procurement income, interest and unexamined miscellaneous receipts did not automatically fall within the exemption.

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