TMI Blog1970 (9) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ter processing, selling the same to the members as well as outsiders. During the previous years relevant to the assessment years 1961-62 and 1963-64, the assessee earned income from processing grey cloth on " labour basis ", and also from processing its own grey cloth. So also the assessee earned income from processing grey cloth on " labour basis " during the previous years relevant to the assessment years 1962-63 and 1964-65. The assessee had also some income from facilitating the marketing of commodities of its members during the previous years relevant to the last three assessment years, namely, 1962-63 to 1964-65. In the course of assessment of the assessee to income-tax for the assessment years 1961-62 to 1964-65, the assessee claimed exemption from tax in respect of income from processing and facilitating the marketing of commodities under section 14(3)(iv) of the Income-tax Act, 1922, for the assessment year 1961-62 and under section 81(iv) of the Income-tax Act, 1961, for the remaining three assessment years. The Income-tax Officer negatived the claim on the view that neither section 14(3)(iv) nor section 81(iv) on its plain natural construction operated to exempt income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society which is also engaged in activities other than those mentioned in this clause, nothing contained herein shall apply to that part of its profits and gains as is attributable to such activities and as exceeds fifteen thousand rupees; (ii) in respect of so much of the profits and gains of business carried on by it as does not exceed fifteen thousand rupees, if it is a co-operative society other than a co-operative society referred to in clause (i) ; (iii) in respect of any interest and dividends derived from its investments with any other co-operative society; (iv) in respect of any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities; (v) in respect of any interest on securities chargeable under section 18 or any income from property chargeable under section 22, where the total income of the co-operative society does not exceed twenty thousand rupees and the society is not a housing society or an urban consumer's society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power ; Provided that nothing contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , storage, processing or facilitating the marketing of commodities. The words so storage, processing or facilitating the marketing of commodities ", according to the revenue, were governed by the preposition " for " and they denoted the purposes for which godowns or warehouses should be let in order that the income derived from such letting should be exempt from tax. Now, on the plain grammatical construction of the language used by the legislature, it appears that the construction suggested on behalf of the revenue is more commendable than that canvassed on behalf of the assessee. As we read the words of the clause, it is apparent that there is no break in the continuity of idea after the word " storage "; the idea flows on into the words " processing or facilitating the marketing of commodities ". As a matter of fact, if we read the clause as a whole, there is no doubt that the words " storage ", " processing or facilitating the marketing of commodities "constitute one single composite clause governed by the preposition " for " signifying that the letting of godowns or warehouses contemplated by the section is letting for any of the three purposes, namely, storage, processing or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81(iv). Whatever construction is, therefore, placed on the language of section 81(iv) must equally hold good so far as section 83 is concerned. Now, the exemption under section 83 is given to an assessee which is an authority constituted under any law for the time being in force for the marketing of commodities. Such an assessee would have obviously only one activity, namely, " marketing of commodities ", and it could not possibly be engaged in the activity of processing. It could have no income derived from processing in any circumstances and on the construction contended for on behalf of the assessee, the word " processing " in section 83 would be rendered devoid of meaning. Section 83 clearly supports the construction canvassed on behalf of the revenue and leaves no doubt that the words "storage "," processing or facilitating the marketing of commodities " go with " letting of godowns or warehouses " and denote the purposes for which godowns or warehouses should be let in order that the income derived from such letting should be exempt from tax. There is also one other circumstance which is, in our opinion, quite decisive of the question. Section 83(iv), as we have already poi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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