1985 (5) TMI 69

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....ying on business of manufacture of canned products, 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 co....

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...." 81. Exemption from income-tax of income from mushroom 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 w....

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....ty. The very fact that the ITO has allowed depreciation 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 buil....