Krishna Cotton and General Mills (P.) Ltd. vs Commissioner of Income Tax

Gokal Chand Mital, J.—The Income Tax Appellate Tribunal, Amritsar Bench, has referred the following question of law for the opinion of this court:

"Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is not entitled to claim deduction of Rs. 6,427 u/s 10(29) of the Income Tax Act, 1961 ?"

It arises out of the following facts :

The Krishna Cotton and General Mills P. Ltd., Jagraon, the assessee, is a private limited company incorporated under the Companies Act, 1956. The assessee received rental income in respect of a godown let out to the Food Corporation of India and claimed exemption u/s 10(29) of the Income Tax Act, 1961, which is as follows :

"10(29) in the case of an authority constituted under any law for the time being in force for the marketing of commodities, any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities ;".

Deduction was not allowed by the Tribunal as the letting out of godowns was not by an authority constituted under any law for the time being in force for the marketing of commodities but was by a private limited company. The assessee wanted to take benefit of the decision rendered by the Supreme Court and the High Courts relating to letting out of godowns by warehousing corporations or such like statutory authorities and they were distinguished.

It is no longer in controversy that the benefit u/s 10(29) of the Income Tax Act can be taken only by the statutory authorities constituted under any law for the time being in force for marketing of commodities like warehousing corporations and for this purpose, reference may be made to COMMISSIONER OF Income Tax, PATIALA-II Vs. HARYANA WAREHOUSING CORPORATION., rendered by this court and Commissioner of Income Tax, Delhi-II Vs. Central Warehousing Corporation, by the Delhi High Court. The benefit of the aforesaid decisions cannot be taken by the assessee. The matter of a private limited company is covered by the decision rendered in Singhal Brothers P. Ltd. Vs. Commissioner of Income Tax, by the Calcutta High Court, against such a company and in favour of the Revenue. We have gone through the aforesaid decisions and fully agree that a company incorporated under the Companies Act is not an authority constitued under any law and cannot take the benefit of concession granted u/s 10(29) of the Income Tax Act, 1961. Following the aforesaid view of the Calcutta High Court, the question is answered in the affirmative, i.e., against the assessee and in favour of the Revenue but with no order as to costs.