TMI Blog1999 (4) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ng further in these matters, it will be convenient to note that hearing of these appeals was taken up together by consent of the parties and these appeals are being disposed of by a common judgment by reason of identity of the issue involved in these appeals. The contextual facts in Appeal No. 3476 of 1993, depict that the Orissa State Warehousing Corporation being the assessee herein received a sum of Rs. 1,74,383 as interest on fixed deposits for the assessment year 1983-84 and since during the relevant period the assessee has had to pay the total interest of Rs. 1,08,063 to the banks, a sum of Rs. 66,320 was added to the income of the assessee as the Income-tax Officer was of the view that the question of resultant difference of income being Rs. 66,320 cannot be said to be an "income exempt" within the meaning of section 10(29) of the Act. The Commissioner of Income-tax (Appeals), Orissa, in the appeal by the assessee upheld the order of the Income-tax Officer but the Tribunal on further appeal, however, came to a different conclusion to the effect that the income in question was exempt under section 10(29). Subsequently, however, at the instance of the Revenue, the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 16 and 24 of the Act of 1962 all moneys coming in the hands of the Corporation have to be deposited in the bank account maintained by the Corporation and the same being a statutory obligation, the question of income, therefore, cannot but be termed to be a part of the functioning of the unit and as such exempt under section 10(29). In this context and having regard to the specific submissions made by Dr. V. Gauri Shankar in support of the appeal it would be convenient to note the abovenoted two statutory provisions for its proper appreciation. Section 16 of the Act of 1962 reads thus : "16. (1) To the warehousing fund shall be credited---- (a) all moneys and other securities transferred to the Central Warehousing Corporation under clause (c) of sub-section (2) of section 43 ; (b) such grants and loans as the Central Government may make for the purposes of the warehousing fund ; and (c) such sums of money as may, from time to time, be realised out of the loans made from the warehousing fund or from interest on loans or dividends on investments made from that fund. (2) The warehousing fund shall be applied---- (a) for advancing loans to State Governments on such ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any income falling within any of the following clauses shall not be included.... (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." 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 facilitating 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 godowns or warehouses for storage, processing or facilitating the same. If the letting out of godowns or warehouses is for any other purpose, the question of exemption would not arise. In continuation of his submissions, Dr. V. Gauri Shankar contended further that a taxing statute ought not to be interpreted with a narrow and res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellant on the exempted income cannot be brought to tax." The above excerpts go to show that the Tribunal has proceeded on the basis, as if the deposits are totally exempt in terms of section 10(29) of the Act but unfortunately there is neither any factual support nor any sanction in law. Section 10(29) is categorical in its language and this exemption is applicable only in the circumstances as envisaged under the section as noticed hereinbefore. Needless to say that the word "any income" as appearing in the body of the statute is restrictive in its application by reason of the user of the expressions "derived from". In the event the intent of the Legislature was otherwise, there was no embargo or restraint to use and express in clear and unequivocal language as has been so expressed in section 10(20A) or 10(21) or 10(22B) or 10(20BB) (sic) or 10(27). These statutory provisions go to show that wherever as a matter of fact the Legislature wanted an unrestrictive exemption the same has used "any income" without any restriction so as to make it explicit that the entire income of the assessee would be exempt. The factum of the Corporation being put into funds by itself can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, be open to the Tribunal to consider the income which has been derived from different sources other than those which have been considered above, and to go into the details of them and then to give a finding as to whether the said income could be said to be income from the letting of godowns for the three purposes mentioned in section 10(29) of the Act." Be it noted that the Tribunal in these civil appeals (4042-4048 of 1994) has interpreted the words "facilitating the marketing of the commodities" as one integrated activity since the assessee derives its income from the following three sources : (I) from letting out of warehouses (II) interest ; (III) from any agricultural produce on behalf of the Food Corporation of India and the State Government. The Tribunal as a matter of fact did accept the submissions on behalf of the assessee that the activity is single, indivisible and integrated and that all the activities are aimed at facilitating the marketing of the goods. The Tribunal held : "...that the activity of the assessee is an integrated one and that the entire activity is aimed at facilitating the marketing of all the goods. The assessee owns warehouses where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Allahabad Bench 'A' of the Appellate Tribunal. The copy of the said order is on pages 1 to 5. This case also pertained to U. P. State Warehousing Corporation. The said Corporation earned interest on short-term fixed deposits. Idle money belonging to the Corporation was deposited and the interest was earned. The question arose whether such interest income qualifies for exemption under section 10(29). The Allahabad Bench 'A' answered the said question in the affirmative and in favour of the assessee. Following the said decision dated July 31, 1976, pages 1 to 5 of the paper book, we hold that the assessee is entitled to claim exemption in respect of interest income amounting to Rs. 11,41,350.25. Then, we take up the supervision charges, fumigation service charges and miscellaneous income amounting to Rs. 23,790.67, Rs. 6,538.85 and Rs. 48,253.49, respectively, for consideration. The assessee having carried on the single and indivisible activity, we hold that these items qualify for exemption under section 10(29) as they are fully covered by the expression 'facilitating the marketing of commodities', as occurred under section 10(29)." In the reference, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the procurement of goods of that person would not have been available. The assessee is not restricted under law to carry on any other business and if the business of acting as an agent has been carried on by him, that activity cannot be considered as letting out of godowns or warehouses for facilitating the marketing of commodities." Dr. D. Pal, the learned senior advocate, appearing in support of these civil appeals, relied strongly on the decision of this court in the case of CIT v. South Arcot district Co-operative Marketing Society Ltd. [1989] 176 ITR 117. Dr. Pal contended that this exemption under section 10(29) is for the purpose of developing the economy so as to achieve social upliftment considering the area in question and since law courts exist for the society, the effort of the law court ought always to be to give the widest possible interpretation so that the society would benefit and exemption be made available to achieve the intent and purposes for which the law makers introduced the same in the statute book. Before proceeding further in the matter, it would be convenient, however, to note the observations in the last noted decision in CIT v. South Arcot Distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. While at the first blush, the submission of Dr. Pal in this perspective seemed to be rather attractive, but on a closer scrutiny the same loses its efficacy. Reliance on the last-noted decision is totally misplaced, since the decision is based mainly on the basis of an agreement which, however, has not seen the light of the day in the instant matter under consideration and it is only by reason of the substance of the agreement that this court came to the conclusion that the assessee is entitled to exemption claimed by it. With greatest of deference, the decision of this court in CIT v. South Arcot District Co-operative Marketing Society Ltd. [1989] 176 ITR 117 cannot be said to have expressed any independent view apart from reliance on the decision of the Gujarat High Court in CIT v. Ahmedabad Maskati Cloth Dealers Co-operative Warehouses Society Ltd. [1986] 162 ITR 142. In any event by reason of the factual situation, the decision is clearly distinguishable and we are thus unable to record our concurrence with the submission of Dr. Pal that the same is a clear authority in favour of the assessee in the matter of grant of exemption under section 10(29) of the Act of 1961. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest, miscellaneous income are termed to be within the ambit of section 10(29) of the Act. We are, however, for the reasons noted above and more particularly because of the language of the section, not in a position to record our concurrence therewith. Further reliance was also placed on the decision of the Allahabad High Court in the case of U. P. State Warehousing Corporation v. ITO [1974] 94 ITR 129. We, however, are not in a position to obtain support in any form whatsoever by reason of the fact that the said matter pertains to the issue as to whether the assessee was an authority within the meaning of section 10(29) of the Act and the High Court's judgment pertains to the same. This decision was, however, subject to scrutiny before this court as well and while it is true that there is concurrence of views but the same was, however, by reason of the factual status and not by reason of any interpretation of law as such, as would be evident from the observations in Union of India v. U. P. State Warehousing Corporation [1991] 187 ITR 54 ; Suppl. 2 SCC 730 as below: "The third test with regard to the exemptable income being in respect of letting of godowns or warehouses for stora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e found to facilitate the marketing of commodities. If income derived from every activity of an authority constituted for the marketing of commodities was meant to be exempted under clause (29), then the said provision would have been enacted as follows : 'any income derived by an authority constituted under any law for the time being in force for the marketing of commodities.' Such a provision would be found in clauses (20A), (21) and (22) of section 10 of the Act. A perusal of these clauses would show that only such income as is derived from a particular source is exempted by clause (29) of section 10 of the Act. Therefore, to claim exemption, it must be proved that the income derived by an authority constituted for the marketing of commodities is income which is derived from the letting of godowns or warehouses for the purposes specified in section 10(29), which are storage, processing or facilitating the marketing of commodities. If the letting of godowns or warehouses is for any other purpose, or if income is derived from any other source, then such income is not exempt under that clause." Further reliance was placed on the decision of this court in the case of CIT v. P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said. If the language of a statute be plain, admitting of only one meaning, the Legislature must be taken to have meant and intended what it has plainly expressed, and whatever it has in clear terms enacted must be enforced though it should lead to absurd or mischievous results. If the language of this sub-section be not controlled by some of the other provisions of the statute. It must, since, its language is plain and unambiguous, be enforced, and your Lordships' House sitting judicially is not concerned with the question whether the policy it embodies is wise or unwise, or whether it leads to consequences just or unjust, beneficial or mischievous." The oft-quoted observations of Rowlatt J. in the case of Cape Brandy Syndicate v. IRC [1921] 1 KB 64 ought also to be noticed at this juncture. The learned judge observed : ".... in a taxing statute one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." The observations of Rowlatt J. as above stand accepted and approved by the House ..... X X X X Extracts X X X X X X X X Extracts X X X X
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