Orissa State Warehousing Corporation v. CIT

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The Tax Publishers1999 TaxPub(DT) 1252 (SC) : (1999) 237 ITR 0589 : (1999) 153 CTR 0177 : (1999) 103 TAXMAN 0623 Orissa State Warehousing Corporation v. CIT () INCOME TAX --Exemption under s. 10(29)----WAREHOUSING CORPORATION--Interest on fixed deposits in bank-- Ratio: Fixed deposit of all sums in the bank does not by itself clothe the assessee to claim exemption irrespective of the factum of there being a statutory obligation to do so, unless such claim for exemption falls squarely and evenly within the four corners of the statutory requirement, therefore, interest on fixed deposits in bank is not eligible for exemption under section 10(29). Held: On a plain reading of section 10(29) , 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, question of exemption would not arise. Section 10(29) is categorical in its language and this exemption is applicable only in the circumstances as envisaged under the section as noticed herein before. 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) or section 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 cannot be termed to be a fund to facilitate the marketing of the commodities, as such question of the interest income accruing therefrom being exempt from tax as has been held by the Tribunal does not and cannot arise. Deposit of all sums in the bank account does not by itself clothe the assessee to claim exemption irrespective of the factum of there being a statutory obligation to do so, unless such claim for exemption falls squarely and evenly within the four corners of the statutory requirement. The facts in issue pertaining to the interest income on fixed deposit or ascribing the activities of the assessee being termed to be one integrated activity does not and cannot arise. The language being clear and there being no ambiguity, question of there being any integrated activity and reading the same into the statue would be a violent departure from the intent of the legislature. Section 10(29) is singularly singular in its application with its scope restrictive as is evident from the intent of the legislature and as evidenced from the language used therein. Case Law Analysis: Decision of Orissa High Court in assessee's case affirmed; M. P. Warehousing Corp. v. CIT (1982) 133 ITR 158 (MP) approved and CIT v. Ahmedabad Maskati Cloth Dealers Co-operative Marketing Society Ltd. (1989) 176 ITR 117 (SC) distinguished Application: Applicable to current assessment year as well. Dt.Judg.: 1-4-1999 A.Y.: 1982-83 Decision: In favour of revenue SUBSCRIBE FOR FULL CONTENT

The Tax Publishers1999 TaxPub(DT) 1252 (SC) : (1999) 237 ITR 0589 : (1999) 153 CTR 0177 : (1999) 103 TAXMAN 0623

Orissa State Warehousing Corporation v. CIT ()

INCOME TAX

--Exemption under s. 10(29)----WAREHOUSING CORPORATION--Interest on fixed deposits in bank--

Ratio:

Fixed deposit of all sums in the bank does not by itself clothe the assessee to claim exemption irrespective of the factum of there being a statutory obligation to do so, unless such claim for exemption falls squarely and evenly within the four corners of the statutory requirement, therefore, interest on fixed deposits in bank is not eligible for exemption under section 10(29).

Held:

On a plain reading of section 10(29) , 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, question of exemption would not arise. Section 10(29) is categorical in its language and this exemption is applicable only in the circumstances as envisaged under the section as noticed herein before. 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) or section 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 cannot be termed to be a fund to facilitate the marketing of the commodities, as such question of the interest income accruing therefrom being exempt from tax as has been held by the Tribunal does not and cannot arise. Deposit of all sums in the bank account does not by itself clothe the assessee to claim exemption irrespective of the factum of there being a statutory obligation to do so, unless such claim for exemption falls squarely and evenly within the four corners of the statutory requirement. The facts in issue pertaining to the interest income on fixed deposit or ascribing the activities of the assessee being termed to be one integrated activity does not and cannot arise. The language being clear and there being no ambiguity, question of there being any integrated activity and reading the same into the statue would be a violent departure from the intent of the legislature. Section 10(29) is singularly singular in its application with its scope restrictive as is evident from the intent of the legislature and as evidenced from the language used therein.

Case Law Analysis:

Decision of Orissa High Court in assessee's case affirmed; M. P. Warehousing Corp. v. CIT (1982) 133 ITR 158 (MP) approved and CIT v. Ahmedabad Maskati Cloth Dealers Co-operative Marketing Society Ltd. (1989) 176 ITR 117 (SC) distinguished

Application:

Applicable to current assessment year as well.

Dt.Judg.:

1-4-1999

A.Y.:

1982-83

Decision:

In favour of revenue