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TMI Blog2013 (12) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... hese appeals filed by the assessee are late by 513 days. Affidavit of the Director of the Company is placed on record explaining the reason in the filing the appeals late. During the appellate proceeding, learned counsel of the assessee filed a decision of the Mumbai Bench Tribunal in the case of Phoenix Mills Ltd. v. Asstt. CIT [IT Appeal No. 6240 (Mum.) 2007, order dated 23-3-2010]. It was explained that the Chartered Accountant, who was looking after the Income Tax matter of the assessee, advised the assessee that no appeal is to be filed against the order of CIT(A), therefore, the assessee did not file appeal. However, when the assessee changed his counsel, who advised that appeals should have been filed and accordingly, the appeals wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that there is a reasonable cause in not filing the appeals in the time. The decision in the case of Phoenix Mills Ltd. (supra), on which reliance has been placed, is in favour of the assessee. In this case the ratio of the decision of the Hon'ble Apex Court in the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi [1979] 118 ITR 507, has been considered, wherein it has been held that the mistake of the counsel may in certain circumstances be taken into account in condoning the delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground. Accordingly, the Hon'ble Apex Court has held that there is a mistake of the counsel and, therefore, the delay in filing the appeal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of speciality chemicals. The assessee company is a wholly owned subsidiary company of M/s Dorf Ketal Chemicals (I) Pvt. Ltd. since 1998-99. The assessee company has leased out its entire business premises for the use of the holding company namely M/s Dorf Ketal Chemicals (I) Pvt. Ltd. for an annual lease rent of Rs. 6,00,000/-. During the assessment proceedings, the AO noticed that the value of factory shed, electricity fitting, plant and machinery and air conditions have been shown as Rs. 44,20,544/-, 41,769/-, 6,84,311/- and Rs. 10,859/-, respectively totaling to Rs. 51,57,484/- and the assessee has claimed depreciation on all the above assets. The assessee was required to explain as to why the lease rent shown by the assessee should no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed strong reliance on the order of CIT(A). 12. After considering the submission and perusing the material on record, I find that there is no merit in the grounds raised by the assessee for the aforesaid assessment years. Though various decisions relied upon by the assessee are on the similar issue, however, facts of each case has to be taken into consideration while deciding the case in hand. In the present case, I noted that the assessee itself has never used the business asset for its business purpose. It was admitted during the appellate proceeding that in immediately preceding year i.e. assessment year 2002-03, the shed was constructed with the funds borrowed from the holding company. No interest has been paid to the holding compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities, it must be held as business income. As stated above, the assessee has never used the shed for its business purpose and immediately after construction, the shed was given to its holding company. Accordingly, for claiming depreciation, the assessee has shown the rental income as business income as there is no other expenses claimed by the assessee in its profit and loss account. Therefore, I am of the view that though the asset is a business asset but the rental income earned by the assessee has to be assessed as income from house property, as the assessee has never used this business asset for its commercial purposes. It is also seen that the factory shed was constructed by the funds of the holding company and was used by the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income. 16. After considering the order of the AO and CIT(A) and the submission of the assessee, I find that the assessee deserves to succeed on the issue involved in all the three appeals. I have already held that the shed owned by the assessee was a business asset and in case of business asset, in my view, provisions of Section 23(1) are not applicable. Therefore, no notional income can be computed in view of the provision of Section 23(1). Accordingly, the appeals of all the three years are allowed by holding as above. 17. In the result, appeals of the assessee for assessment years 2003-04 to 2006-07 (i.e. ITA Nos. 3228 to 3231/M/2013) are dismissed and appeals for assessment years 2007-08 to 2009-10 (i.e. ITA Nos. 3232 to 3234/M/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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