Income derived from commission charges for handling goods and interest received from banks is not exempt under Section 10(29) of the Income Tax Act, 1961, as it is not income derived from the letting of godowns or warehouses.

Sohani, J.

1. By this reference under Section 256(1) of the I.T. Act, 1961, hereinafter called "the Act," the Income Tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal correctly stated the ratio of the decision in [1974] 94 ITR 129 (All) (U. P. State Warehousing Corporation v. ITO) and was justified in holding that the commission received for handling the goods is not the business income and was not exempt under Section 10(29) ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the interest received from the banks on deposits of moneys held in the course of its business was not incidental or consequential to the activities of the business and was taxable under the head 'Income from other sources' and thus not exempt under Section 10(29) ?"

2. The material facts giving rise to this reference briefly are as follows : The assessee is a corporation established under the provisions of the Warehousing Corporations Act, 1962. For the assessment years 1972-73 an4 1973-74, the assessee had received commission charges for handling the work of loading and unloading of agricultural commodities from the Fertilizer Corporation of India and the Food Corporation of India. The assessee had also received interest on deposits with the banks. Exemption was claimed under Section 10(29) of the Act for the amount of interest and commission charges received by the assessee. The ITO rejected the claim. On appeal, the AAC and, on further appeal, the Tribunal upheld the order of the ITO in this behalf. Hence, at the instance of the assessee, the Tribunal has referred the aforesaid questions of law to this court for its opinion.

3. Shri Chitale, learned counsel for the assessee, contended that the clause "income derived from... facilitating the marketing of commodities", occurring in Section 10(29) of the Act, was wide enough to include receipt of commission charges for loading and unloading, and interest received from banks by the assessee. It was urged that the Tribunal erred in holding that the provisions of Clause (29) of Section 10 of the Act were attracted only when income was derived from the letting of godowns or warehouses. Learned counsel for the assessee relied on the decision in U.P. Stale Warehousing Corporation v. no [1974] 94 ITR 129 (All). In reply, Shri Bagadiya, learned counsel for the department, urged that income derived by way of commission charges by the assessee or income derived by way of interest on fixed deposits could not be held to be income derived from letting of godowns or warehouses by the State Warehousing Corporation, which alone was exempt from taxation under Section 10(29) of the Act.

4. The decision reported in U.P. State Warehousing Corporation v. ITO [1974] 94 ITR 129(All) dealt with the question as to whether the U.P. State Warehousing Corporation was an authority constituted for the marketing of commodities. That question is not in issue in the instant case. Learned counsel for the parties conceded that the decision in U.P. State Warehousing Corporation v. ITO [1974] 94 ITR 129 (All) has no bearing on the questions involved in the instant case. Hence, the first question referred to this court by the Tribunal should, in our opinion, be refrained to bring out the real controversy between the parties. We, therefore, reframe that question as follows :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the commission charges received by the assessee for handling the goods was not exempt under Section 10(29) of the Income Tax Act, 1961 ?"

5. Now, the answer to the aforesaid question depend upon the construction of Section 10(29) of the Act. That provision reads as follows :

"10. Incomes not included in total income,--In computing the total income of a previous year of any per