UNION OF INDIA AND ANR. vs U.P. STATE WARE HOUSING CORPORATION

The Supreme Court examined whether the rental income derived by the U.P. State Warehousing Corporation from its godowns and warehouses is exempt under Section 10(29) of the Income Tax Act, 1961. The Court held that exemption applies if the entity is an authority constituted under any law for marketing commodities and the income is from letting godowns or warehouses for storage, processing, or facilitating marketing. The Court found that the U.P. State Warehousing Corporation, being a statutory authority under the Warehousing Corporations Act, 1962, qualifies for exemption. Consequently, the appeal by the Revenue was dismissed, upholding the High Court's quashing of the tax demand notice.