Warehousing corporation exemption under income tax law upheld for income from letting godowns and warehouses.

A State Warehousing Corporation qualified as an authority constituted under law for the marketing of commodities, and its statutory functions of purchase, sale, storage and distribution of agricultural produce and allied commodities were held to facilitate such marketing. Income derived from letting of godowns or warehouses fell within the statutory condition in section 10(29) of the Income-tax Act, 1961. The corporation therefore satisfied all requirements for the exemption and was entitled to relief on the warehouse-letting income.

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Issues: Whether the assessee, a State Warehousing Corporation, was entitled to exemption under section 10(29) of the Income-tax Act, 1961 in respect of income derived from letting of godowns or warehouses.

Analysis: The exemption under section 10(29) applies where the recipient is an authority constituted under any law for the time being in force for the marketing of commodities and the income is derived from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities. The Corporation was a creature of the Warehousing Corporations Act, 1962 and therefore an authority constituted under law. Its functions under section 24(d) of the Warehousing Corporations Act, 1962, including purchase, sale, storage and distribution of agricultural produce and allied commodities, were held to facilitate marketing of commodities. The income in question was admittedly from letting of godowns or warehouses.

Conclusion: The assessee satisfied all statutory conditions and was entitled to exemption under section 10(29) of the Income-tax Act, 1961.

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