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TMI Blog2004 (9) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn on February 16, 1982, showing a total loss of Rs. 1,02,240. In the course of assessment proceedings it also filed a letter dated November 29, 1982, claiming deduction of Rs. 24,960 under section 80P(2)(a)(ii) in respect of brick kiln business claiming it to be a cottage industry thereby increasing the returned loss to Rs. 1,27,200. It may be mentioned here that along with the revised return the respondent had filed a letter claiming deduction under section 80P(2)(e) of the Act in respect of the income of the cold storage owned by it. The Income-tax Officer did not allow exemption under section 80P(2)(e) of the Act to the respondent on the income from the cold storage. Feeling aggrieved, the respondent preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) had upheld the claim made by the respondent and directed that the deduction be allowed under section 80P(2)(e) of the Act in respect of the income from the running of the cold storage. The Revenue's appeal before the Tribunal has failed. We have heard Sri A.N. Mahajan, learned standing counsel for the Revenue, and Sri Vikram Gulati, learned counsel for the respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely: - . . . (e) in respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income." The question is whether a cold storage can be treated as a godown or a warehouse for storage purpose or not? In the Law Lexicon, the encyclopaedic law dictionary of P. Ramanatha Aiyar, 1997 edition, at page 344 "cold storage business" has been defined as business of storing and preserving commodities in a cool place for hire or reward. In Words and Phrases, Permanent Edition, Volume 7A, at page 136, "cold storage" and "cold storage business" have been described as follows: " 'Cold storage'. - Plant operated for cold storage and curing of meat, was a 'cold storage' plant within the meaning of city's zoning ordinance, as construed and administered by city officials. 'Cold storage' is the storage of provisions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse. According to that dictionary, a "warehouse" is a place licensed for the storage of goods. Halsbury's Laws of England (fourth edition), Note 3 to paragraph 428, on page 204, reads as under: " 'warehouse' means a place used for the storage of goods, even temporarily, as in a dock transit shed: A storage place which is ancillary to a business which is wholly or substantially retail is not a warehouse: A room in the basement under retail sale-rooms used for storing goods temporarily until wanted in the sale-rooms was held not to be a warehouse in Burr v. William Whiteley Ltd. [1902] 19 ITR 117. These cases are not to be taken as a laying down an absolute rule of law that no building can be a warehouse if it is connected with a retail business alone; it is possible even in a retail business to have a building which may be in the fullest sense of the term a warehouse." It will appear from the above dictionary meanings of "godowns" and "warehouses" that both these terms are synonymous and interchangeable. The common parlance meaning which can be attributed to godowns or warehouses is that they must be used for the purpose of storage of goods even for a temporary period. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of storage of goods even for a temporary period. The expression "facilitating the marketing of commodities" would suggest a stage anterior to the actual sale of the commodity. In the case of South Arcot District Co-operative Marketing Society Ltd. [1989] 176 ITR 117, the apex court has held that the provisions for exemption under section 14(3)(iv) of the Indian Income-tax Act, 1922, which is analogous to section 80P(2)(e) of the Act was intended to encourage co-operative societies to construct warehouses which were likely to be useful in the development of rural economy and exemption was granted from income-tax in respect of income derived from the letting of such warehouses for the storage of fertilizers and other related commodities concerned with co-operative marketing. The apex court has further held that having regard to the object with which the provision has been enacted, it is apparent that a liberal construction should be given to the language of the provision and that, therefore, in the circumstances of the present case, it must be regarded that what the assessee did was to let out its godowns for the purpose of storing the ammonium sulphate handed over to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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