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TMI Blog1985 (5) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts, fruits and mushrooms, etc. He claimed depreciation at 15 per cent on the shed in which mushrooms are grown. The ITO allowed depreciation at 7.5 per cent as applicable to third class building negativing the assessee's claim that the shed as a factory building was entitled to depreciation at twice the normal rate. The Commissioner (Appeals) also confirmed the order of the ITO. The assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oom growing under controlled conditions.--Under the existing provisions, 'agricultural income' is exempt from income-tax. For this purpose, 'agricultural income' includes, inter alia, any income derived from land situated in India and used for agricultural purposes. Where cultivation of mushrooms is undertaken in rooms or sheds with soil put in wooden beds, income derived therefrom cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 7.5 per cent on the shed implies that he has also accepted that the assessee is carrying on a business activity. In the light of these facts, we have to reject the argument on behalf of the revenue now advanced that mushroom growing is an agricultural activity. It remains to be seen whether the shed is to be considered as a factory building. Evidently, the assessee is growing mushrooms and sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity is the mushroom. Therefore, there can be no hesitation in accepting the contention of the assessee that the shed in which the mushrooms are grown is a factory building and as such a business activity of producing something as opposed to ordinary trading of existing materials is carried on. Thus, the shed building has to be considered as a factory building. We, accordingly, allow the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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