Warehousing corporation is not exempt u/s 10(29). - Income Tax - 1105/CBDT

INSTRUCTION NO. 1105/CBDT Dated : October 4, 1977 Section(s) Referred: 10(29) ,285 Statute: Income - Tax Act, 1961 Kindly refer to the earlier instruction of the Board on the above subject. The consideration that have weighed with the Board in deciding that the warehousing corporation is not exempt under section 10(29) are that such corporation is not "an authority constituted under any law for the time being in force" and does not have the function of "the marketing of commodities". The view so far held is that provision of facilities for storage, grading, distribution, collection and delivery of goods and activities connected therewith would not constitute "marketing" without the basic pre-requisite of buying and selling of good, being carried on and that if there is buying and selling of goods, the other activities as enumerated above would also be entitled to be called 'marketing'. The Board did not contribute to the concept that the term 'marketing had very wide scope and covered not only purchase and sale but also other activities and facilities necessary for the marketing of goods namely, storage, grading etc. Accordingly, the Board did not accept the decision of the Allahabad High Court in U.P.State Warehousing Corporation Vs ITO (1974) 94-ITR-129 and as a result of certificate of fitness granted the appeal was filed before the Supreme Court where it is pending. 2. Recently the Punjab Haryana High Court in CIT Vs Haryana State warehousing Corporation (I.T. Reference Nos.46, 249 of 1975 decided on December 22, 1976), after following the Allahabad High Court decision held that such corporation was an authority and that such authority had been constituted for the marketing of commodities within the meaning of section 10(29). On the advice of the Learned Solicitor General of India the decision of the Court has been accepted. The Board are advised that the Haryana State Warehousing Corporation would be squarely covered by section 10(29) and that the view of the High Court is not open to doubt. 3. The Board have, therefore, re-considered the whole matter in the light of the latest development and have decided that any income derived from the letting of godowns or warehouses for storage processing or facilitating the marketing of commodities will be exempt in the case of any warehousing corporation, Central or State under section 10(29). The Commissioners of Income-tax may, therefore, concede/withdraw such matters pending in appeal at different stages.