TMI Blog1980 (7) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities? (2) If the answer to the first question is in the negative, whether, on the facts and in the circumstances of the case, the contributions made by the assessee to the provident fund maintained for its employees are deductible from its income from business under section 37(1) of the Income-tax Act, 1961 ? " At the outset, we must mention that the frame of the second question is not quite accurate. It should have been an independent question as it does not depend upon the answer to the first question. The subject matter of the second question is whether an expenditure by way of contribution to the provident fund scheme established b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage and distribution of agricultural Produce, seeds, manures, fertilizers, agricultural implements and notified commodities; and (underlining by us) (e) carry out such other functions as may be prescribed." The preamble read with s. 24(d) of the Act makes it clear that the Corporation is an authority constituted by law for the purpose of marketing of agricultural produce, etc. The matter relates to the assessment for the assessment year 1970-71. That was the first year when after setting off the losses of the earlier years, there accrued a positive profit to the assessee. That income was derived by the assessee by providing storage facilities for agricultural produce by letting out the warehouses belonging to it. The assessee claimed exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C disallowed the claim of the assessee that this was an expenditure deductible in the computation of its business income. But in second appeal the Tribunal held that the expenditure was fully and exclusively for the purpose of business and came within the ambit of s. 37(1) of the I.T. Act, 1961, and directed the deduction of the same in the computation of the income. It is in these circumstances that the two questions have been referred for the opinion of this court at the instance of the Commissioner. As noticed earlier, there can be no dispute that the assessee is an authority constituted for the marketing of commodities. It is obvious that the AAC did not take note of the provisions of s. 24(d) of the Warehousing Corporations Act whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight in holding that the assessee was entitled to the exclusion of this particular type of income in the computation of its income from business. So far as the second question is concerned, the view taken by the Tribunal is that though the provident fund scheme would not come within the ambit of s. 36(1)(iv), the expenditure was wholly and exclusively for the purpose of business and came within the purview of s. 37(1) of the I.T. Act. The mere fact that the contribution could not come within the ambit of the provisions of s. 36(1)(iv) would not disentitle the assessee to claim the benefit under s. 37(1) if the requirements thereunder were satisfied. There is no dispute that the expenditure was wholly and exclusively for the Purpose of bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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