Warehousing income exemption under section 10(29) upheld where receipts were integral to storage-based commodity marketing activity.

Income derived by an authority constituted for marketing commodities is exempt under section 10(29) only when it arises from letting godowns or warehouses for storage, processing, or facilitating commodity marketing. On the facts noted, miscellaneous receipts were treated as rent-like warehousing receipts, and commission on procurement of wheat was part of a single integrated activity in which storage was the dominant element. The label attached to the receipts did not change their real character. The receipts therefore fell within section 10(29) and remained exempt from tax, and section 39 of the Warehousing Corporations Act, 1962 did not affect that result.

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Issues: Whether the assessee's miscellaneous receipts and commission on procurement of wheat constituted income derived from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities so as to qualify for exemption under section 10(29) of the Income-tax Act, 1961, notwithstanding section 39 of the Warehousing Corporations Act, 1962.

Analysis: Section 10(29) exempts income derived by an authority constituted under law for the marketing of commodities, but only where the income is from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities. The assessee satisfied the character of an authority constituted for marketing of commodities. On the facts found, the so-called miscellaneous receipts were in substance rent-like receipts from warehousing activity. The commission for procurement of wheat was part of a single indivisible activity in which storage was the dominant element, and the label attached to the receipt did not alter its real nature.

Conclusion: The receipts fell within section 10(29) and were exempt from tax, and section 39 of the Warehousing Corporations Act, 1962 did not alter that conclusion.

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