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Issues: Whether the assessee was an authority constituted under law for the marketing of commodities so as to qualify for exemption under section 10(29) of the Income-tax Act, 1961, and whether income from letting of godowns and warehouses used in warehousing activities was exempt.
Analysis: The provision was construed in its statutory context and in light of its beneficent object. The word "authority" was held not to be confined to a body possessing quasi-governmental powers; any juristic entity constituted by law for the marketing of commodities would satisfy the requirement. The expression "marketing of commodities" was read in a wide sense, covering activities such as storage, warehousing, transport, grading and distribution, and not merely buying and selling. Legislative history showed that Parliament intended to encourage statutory warehousing bodies by granting tax exemption on income from letting godowns or warehouses for storage, processing, or facilitating the marketing of commodities. Applying that interpretation, a State Warehousing Corporation established under the Warehousing Corporations Act, 1962, and functioning for warehousing and related transport of agricultural produce, fell within section 10(29).
Conclusion: The assessee was entitled to exemption under section 10(29) in respect of the relevant income, and the impugned notice of demand was invalid.
Ratio Decidendi: For section 10(29), a statutory corporation created for warehousing and allied activities that facilitate the flow of commodities is an authority constituted for the marketing of commodities, and the expression "marketing" in that provision bears a broad, purposive meaning.
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