1989 (1) TMI 3

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....appeal by certificate granted by the High Court of Madras is directed against the judgment of the High Court disposing of reference in favour of the assessee and against the Revenue. The respondent-assessee is a co-operative society registered under the Madras Co-operative Societies Act. The assessee entered into an agreement with the State Government during the previous year ending June 30, 19....

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....n respect of the said sum of Rs. 31,316. The Income-tax Officer denied the exemption, and on appeal, the Appellate Assistant Commissioner of Income-tax confirmed the denial. But, on second appeal by the assessee, the Income-tax Appellate Tribunal held that the various terms of the agreement with the State Government constituted consideration for letting the godowns, and that any servicing done in ....

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....at the servicing was an insignificant portion of the whole amount is reasonable and consistent with the material on record ?" The High Court endorsed the view taken by the Income-tax Appellate Tribunal and answered the reference against the Revenue and in favour of the assessee. We have considered the matter carefully and to our mind, it seems clear that the Appellate Tribunal and the High C....

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....of the provision and that, therefore, in the circumstances of the present case, it must be regarded that what the assessee did was to let out its godowns for the purpose of storing the ammonium sulphate handed over to it by the State Government. The remaining services performed by the assessee were merely incidental to the essential responsibility of using the godowns for the storage of that stock....