TaxTMI 
TaxTMI 
1981 (4) TMI 138
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....s on behalf of the State Government and the Food Corporation of India ('the FCI') and derived income from such activity also during the year under appeal. The assessee also derived income from interest, supervision charges, fumigation service charges and miscellaneous items. From perusal of the profit and loss account (see page 21 of the annual report and statement of accounts of the assessee, pertaining to the assessment year 1975-76, included on page 23 of the paper book), it appears that the assessee derived the following incomes during the year under appeal:  ....
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....nbsp; 11,41,350.23 5. Misc. Income 48,253.49 The assessee claimed an exemption in respect of the whole income under section 10(29) of the Income-tax Act, 1961 ('the Act') which says that in computing the total income of a previous year of any person, any income derived by an authority constituted under any law for the time being in....
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....espect of income derived from the warehousing activity and not in respect of gross receipts from this activity. It can be nobody's case that 'income' can be correctly computed without deduction of expenses from the receipts especially in a case where the source of such income is the principal activity of the assessee and the expenses are mainly incurred for carrying on that activity. In view of the facts of the case, I am of the opinion that the ITO was correct in law to determine the tax-exempt income from the warehousing activities by deducting proportionate expenses from the receipts of warehousing charges (sic). No interference is called for from me on this point." 3. This is how the assessee has come up in appeal to the Tribunal. Befo....
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....ssee. Procurement of foodgrain was done by the assessee at the instance of the State Government and FCI. In the nature of the activity being carried on by the assessee, it cannot be said that the assessee's activity of warehousing is different from the other activities. The Gujarat High Court in CIT v. Gujarat State Warehousing Corporation [1980] 124 ITR 282 held that marketing includes all business activities directed towards the flow of goods and services from producer to consumer. Similar view has been taken by other High Courts also. Relying on this authority, we hold that the whole activity being carried on by the assessee as an integrated one and that the activities of the assessee cannot be split up. The issue arising out of this cas....