Case: Orissa State Warehousing Corporation Vs. Commissioner of Income Tax

3. The contextual facts in Appeal No. 3476 of 1993 depict that the Orissa State Warehousing Corporation being the assessee herein received a sum of Rs. 1,74,383/- as interest on fixed deposits for the assessment year 1983-84 and since during the relevant period the assessee has had to pay the total interest of Rs. 1,08,063/- to the banks, a sum of Rs. 66,320/- was added to the income of the assessee as the Income-tax Officer was of the view that question of resultant difference of income being Rs. 66,320/- cannot be said to be an `income exempt within the meaning of Section 10(29) of the Act.4. The Commissioner of Income Tax (Appeals), Orissa in the appeal by the assessee upheld the order of the Income-tax Officer but the Tribunal on a further appeal however, came to a different conclusion to the effect that the income in question was exempt under Section 10(29). Subsequently, however, at the instance of the Revenue, the following two questions were referred to the High Court for opinion under Section 256(1) of the Act"Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the interest received by the assessee from the banks on fixed deposits was exempt u/s 10(29) of the I.T. Act, 1961 ?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 fixed deposits was incidental to or consequential to the activities of the business of the assessee and was not taxable under the head `income from other sources and, thus exempt under section 10(29) of the I.T. Act, 1961High Court in its turn, however, answered the first question in the negative and against the assessee and thereby affirmed the view of the Income-tax Officer and hence the appeal. Incidentally, the High Court did not deem it necessary to answer the second question by reason of the answer given to question No.the contextual facts are at slight variation with each other in these appeals, it would be convenient to deal with the Appeal No. 3476 of 1993 at this juncture before proceeding with the factual context pertaining to other seven appeals.

Reasoning: In fine thus, a fiscal statute shall have to be interpreted on the basis of the language used therein and not de hors the same. No words ought to be added and only the language used ought to be considered so as to ascertain the proper meaning and intent of the legislation. The Court is to ascribe natural and ordinary meaning to the words used by the legislature and the Court ought not, under any circumstances, to substitute its own impression and ideas in place of the legislative intent as is available from a plain reading of the statutorythe premises, we do feel it expedient to record that by reason of the clarity of expression, question of there being any integrated activity being exempt within the meaning of Section 10(29) of the Act does not and cannot arise. The Madhya Pradesh High Court has correctly applied the law and the comparison effected with other provisions are pointers to the distinction and the same cannot but be termed to be in accordance with the golden rule of construction in the matter of interpretation ofdo herein record our acceptance of the same and observe that 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 form the language useddue regard to the language used question of exemption would arise pertaining to that part of the income only which arises or is derived from the letting of godowns or the warehouses and for the purposes specified in Section 10(29) of the Act - as noticed above. The statute has been rather categorical and restrictive in the matter of grant of exemption: storage, processing or facilitating the marketing of the commodities are definitely regarded as three different forms of activities which are entitled to exemption in the event of their being any income therefrom. We do lend our concurrence to the view expressed by the Madhya Pradesh High Court and record that in the event the letting of godowns or warehouses is for any other purpose or if income is derived from any other source, then and in that event such an income cannot possibly come within the ambit of Section 10(29) of the Act and is thus not exempt from tax. 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. Mr. C.S. Vaidyanathan, Addl. Solicitor General rightly contended that the language being clear and there being no ambiguity, question of there being any integrated activity and reading the same in to the statue would be a violent departure from the intent of the legislature.