Statutory warehousing corporation treated as an authority for commodity marketing, preserving exemption on warehouse rental income.

A statutory warehousing corporation created under the Warehousing Corporations Act, 1962 may qualify as an authority constituted for the marketing of commodities where its functions include purchase, sale, storage and distribution of agricultural produce and notified commodities. The deeming provision treating the corporation as a company for income-tax purposes does not negate its character as an authority for exemption purposes under section 10(29) of the Income-tax Act, 1961. On that basis, income from letting of godowns and warehouses was treated as eligible for exemption.

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Issues: Whether a State Warehousing Corporation is an authority constituted under law for the marketing of commodities so as to qualify for exemption on income from letting of godowns and warehouses under section 10(29) of the Income-tax Act, 1961.

Analysis: The Corporation was created under the Warehousing Corporations Act, 1962 and functioned as a statutory body under governmental control. The expression "authority" was construed broadly to include a legal entity or juristic person constituted by law for marketing commodities. Section 39 of the Warehousing Corporations Act, 1962, deeming a warehousing corporation to be a company for income-tax purposes, did not exclude its character as an authority for the purposes of section 10(29). The functions of the Corporation, including purchase, sale, storage and distribution of agricultural produce and notified commodities, brought it within the wider concept of marketing of commodities.

Conclusion: The assessee was held to be an authority constituted for the marketing of commodities and its income from letting of godowns and warehouses was entitled to exemption under section 10(29) of the Income-tax Act, 1961.

Final Conclusion: The references were answered in favour of the assessee by recognising the warehousing corporation as a qualifying statutory authority for the exemption claimed.

Ratio Decidendi: A statutory corporation established for the storage, distribution and facilitation of commodity trade may constitute an authority for the marketing of commodities, and a deeming provision for income-tax liability does not negate that character for exemption purposes.

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