TMI Blog2011 (10) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... , supervisory charges and portion of the miscellaneous income not offered to tax under Section 10(29) of the Income Tax Act, 1961 (for short hereinafter referred to as 'Act'). 2. The assessee is an authority constituted under the provisions of the Karnataka Ware House Act, 1961. The assessee claimed exemption of its income under Section 10(29) of the Act. The appellant filed the returns of income for the assessment years 1992-93 to 1997-98 declaring 'Nil' income. The Assessing Officer found that the assessee had the following income besides warehouse charges: (i) Interest Income (ii) Fumigation and Disinfestation Services (iii) Income from Supervisory Charges (iv) Miscellaneous income (v) Aerial Spraying collections (vi) Coffee and soil fumigation collections 3. The Assessing Authority held that assessee is not entitled to exemption under Section 10(29) with regard to the above category of incomes and he framed an order of assessment. Aggrieved by the same the assessee preferred an appeal to the Commissioner of Income Tax (Appeals). The assessee contended that the fumigation, disinfestation and supervisory service charges collected by the assessee were direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made out. 6. Per contra, learned counsel for the revenue submitted that the Supreme Court in the aforesaid Orissa State Warehousing Corpn.'s case (supra) has categorically held that charges which are collected by the assessee were not mentioned in Section 10(29) to attract tax liability. Fumigation charges, disinfestation charges supervisory charges have nothing to do with rental charges payable and therefore, he submits the findings recorded by the three authorities concurrently is valid and legal and to not call for any interference. 7. In the light of the aforesaid facts and the rival contentions, the substantial question of law that arise for our consideration is as under: "Whether the fumigation charges, disinfestation charges, supervisory charges collected by the Corporation from its customer to whom the warehouse is let out for the purpose of storage and then facilitate marketing would full within the mischief of Section 10(29) of the Act?" 8. Chapter 3 in which Section 10 finds a place deals with income which do not form part of total income. Section 10 in particular deals with income not included in total income. Section 10(29) reads as under: "In the case of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dental to or consequential to the activities of the business of the assessee and was not taxable under the head 'Income from other sources' and, thus exempt under section 10(29) of the IT Act, 1961?" 11. In answering the said question they have also held as under: "9. On a plain reading of section 10(29) of the Act as above, it appears that the pre-requisite element for the entitlement as regards the claim for exemption is the income which is derived from letting out of godowns or warehouses for storage, processing or facilating marketing of commodities and not otherwise. The Legislature has been careful enough to introduce in the section itself, a clarification by using the words 'any income derived therefrom', meaning thereby obviously for marketing of commodities by letting out of gowowns or warehouses for storage, processing or facilitating the same. If the letting out of godowns or warehouses is for any other purpose, question of exemption would not arise. 23. In our opinion, it would not be permissible to introduce words in the provisions of cl. (29). To do so will be to read in the aforesaid clause words which do not occur there. Moreover, all the activities of a body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n letting out godowns and warehouses, then such income is not exempt in the clause. Having due regard to the language used, a question of assumption would arise pertaining to that part of the income which arises or is derived from the letting of godowns or the warehouses and for the purposes specified in Section 10(29) of the Act, as noticed above. Therefore, in the aforesaid judgment it is nowhere stated that when income is derived from letting out of godowns or warehouses to facilitate marketing of commodities and as a consequence of such letting out if the assessee incurs expenditure for facilitating commodities to be marketed by fumigation, disinfestations or for supervision, that income is not included under Section 10(29). Therefore, this is a case of misreading of the judgment by the Tribunal. 13. In fact in the case of CIT v. Rajasthan State Warehousing Corpn. [1994] 75 Taxman 66 (Raj.) the Division Bench has squarely pointed out the meaning of the words 'facilitating marketing of commodities' at para 12 which is as under: "12. It is true that the words 'facilitating the marketing of commodities' is of wider scope which include number of activities, but the same has to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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