Law:

Section:

Section 10(29) of the Income-tax Act, 1961 - Marketing Societies, Income from Letting of Godowns - Assessment years 1971-72 and 1972-73 - Assessee company was incorporated under Indian Companies Act, 1913 for carrying on business of manufacture and sale of edible oils-Subsequently, it discontinued manufacture and ceased all ancillary business operations - Thereafter, assessee's only income was rent derived from letting out its godowns - It claimed exemption under section 10(29) - Whether, assessee, company did not satisfy primary test of section 10(29), it was not an 'authority' as constituted for marketing of commodities within meaning of section 10(29) and was, therefore, not entitled to exemption under that statutory provision in respect of its rental income from its godowns - Held, yes Words and phrases: Expression 'authority' as occurring in section 10(29) of the Income-tax Act, 1961. FACTS Till 1967, the assessee-company incorporated under the Indian Companies Act, 1913 was carrying on business of manufacture and sales of edible oils, and, owned a factory and godowns. In 1967, the directors of the assessee decided to discontinue manufacture and to cease all ancillary business operations. The only income of the assessee thereafter was rent derived from letting out its godowns. In the relevant assessment years, the assessee claimed exemption under section 10(29) in respect of its rental income. The Income-tax Officer rejected the claim on the ground that the assessee had not been constituted under any specific enactment for marketing of commodities. The AAC the assessee's appeal holding that, even if the assessee was accepted to be an authority constituted under the Companies Act, it was not so constituted for marketing of commodities. The Tribunal upheld the decision of the AAC. On reference : HELD The expression 'authority' used in 10(29) has got to be given a meaning. The mere fact that a juristic personality is created under any particular statute or law having as its direct or indirect object, marketing of commodities, will not make the entity an "authority" within the meaning of the section 10(29). Such juristic entity or personality must have some…

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