1980 (7) TMI 98

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....the Income-tax Act, 1961, in respect of the income from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities? (2) If the answer to the first question is in the negative, whether, on the facts and in the circumstances of the case, the contributions made by the assessee to the provident fund maintained for its employees are deductible from its income from business under section 37(1) of the Income-tax Act, 1961 ? " At the outset, we must mention that the frame of the second question is not quite accurate. It should have been an independent question as it does not depend upon the answer to the first question. The subject matter of the second question is whether an expenditure by way of con....

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....he Government for the Purposes of the purchase, sale, storage and distribution of agricultural Produce, seeds, manures, fertilizers, agricultural implements and notified commodities; and (underlining by us) (e) carry out such other functions as may be prescribed." The preamble read with s. 24(d) of the Act makes it clear that the Corporation is an authority constituted by law for the purpose of marketing of agricultural produce, etc. The matter relates to the assessment for the assessment year 1970-71. That was the first year when after setting off the losses of the earlier years, there accrued a positive profit to the assessee. That income was derived by the assessee by providing storage facilities for agricultural produce by letting ou....

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....at behalf amounted to Rs. 15,676. The ITO as well as the AAC disallowed the claim of the assessee that this was an expenditure deductible in the computation of its business income. But in second appeal the Tribunal held that the expenditure was fully and exclusively for the purpose of business and came within the ambit of s. 37(1) of the I.T. Act, 1961, and directed the deduction of the same in the computation of the income. It is in these circumstances that the two questions have been referred for the opinion of this court at the instance of the Commissioner. As noticed earlier, there can be no dispute that the assessee is an authority constituted for the marketing of commodities. It is obvious that the AAC did not take note of the p....