SUDHA ORGANICS P.LTD, MUMBAI V. DCIT CEN CIR 45, MUMBAI

ITA 3239/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4234 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 05-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A DHYANI
• Assessee Lawyers: CHAMPA PUROHIT
• Keywords: Business income; Depreciation; Bonafide belief; Wholly owned subsidiary; Reasonable cause
• Section: 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER / I .T A NO S . 3235 TO 3241/MUM/2013 ( / ASSESSMENT YEAR S : 2003 - 04 TO 2009 - 10 M/S. SUDHA ORGANICS PVT. LTD., 1, DORF KETAL TOWER, ORLEM, MALAD (W), MUMBAI - 400 064 / VS. THE DCIT, CENTRAL CIRCLE - 45, MUMBAI ./ ./ PAN/GIR NO. AAFCS 9904D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI CHAMPA PUROHIT / RESPONDENT BY: SHRI R.A. DHYANI / DATE OF HEARING : 03 . 0 2 . 201 6 / DATE OF PRONOUNCEMENT : 10 . 0 2 .201 6 / O R D E R PER BENCH : THESE APPEAL S BY THE ASSESSEE ARE PREFERRED AGAINST THE VERY SAME ORDERS OF THE LD. CIT(A) - 38 , MUMBAI DATED 23.08.2011 PERTAINING TO ASSESSMENT YEAR S 2003 - 04 TO 200 9 - 1 0. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE COMMON GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1. THE LD. CIT(A) HAS GROSSLY ERRED IN CONF IRMING THE FINDING OF THE AO THAT THE APPELLANT HAS EARNED RENTAL INCOME AND NOT BUSINESS INCOME. ITA NO S . 3235 TO 3241/M/2013 2 2. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE AMOUNT RECEIVED ON WAREHOUSING CHARGES WAS TOWARDS COMPOSITE COMPENSATION FOR USE OF FACTORY WITH PLANT AND WAS HENCE TAXABLE UNDER THE HEAD INCOME FROM BUSINESS OR I NCOME FROM OTHER SOURCES. 3. ALL THESE APPEALS FILED BY THE ASSESSEE ARE DELAYED BY 513 DAYS. AFFIDAVIT OF THE DIRECTOR OF THE COMPANY IS PLACED ON RECORD EXPLAINING THE REASON S IN FILING THE APPEALS BELATEDLY . 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE ON MERIT IS DECIDED PARTLY AGAINST THE ASSESSEE AND PARTLY IN FAVOUR OF THE ASSESSEE IN GROUP CONCERNS VIZ., M/S. PERFECT SCALE COMPANY PVT. LTD. IN ITA NOS 3228 TO 3234/M/201 3 FOR ASSESSMENT YEARS 2003 - 04 TO 2009 - 10 VIDE ORDER DATED 06.09.2013 WHEREIN IT WAS HELD THAT FOR THE ASSESSMENT YEARS 2003 - 04 TO 2006 - 07, THE RENTAL INCOME RECEIVED BY THE ASSESSEE WAS ASSESSED AS INCOME FROM HOUSE PROPERTY BY AFFIRMING THE ORDER OF THE AO AND LD. CIT(A). IN SO FAR AS THE ASSESSMENT YEARS 2007 - 08 TO 2009 - 10 ARE CONCERNED, THE HONBLE TRIBUNAL HELD THAT THE SHED OWNED BY THE ASSESSEE IS A BUSINESS ASSET AND IN CASE OF BUSINESS ASSET PROVISIONS OF SEC. 23(1) ARE NOT APPLICABLE, THEREFORE , ALLOWED THE APPEALS OF THE ASSESSEE. 4.1. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT THE HONBLE TRIBUNAL CONDONED THE DELAY OF 513 DAYS IN THE GROUP CONCERN ALSO. SINCE FACTS AND CIRCUMSTANCES BEING IDENTICAL, THE LD. COUNSEL SUBMITS THAT THE ORDER MAY BE FOLLOWED. 5. THE LD. DEPART MENTAL REPRESENTATIVE HAS NO SERIOUS OBJECTION IN FOLLOWING THE ORDER OF THIS TRIBUNAL IN SISTER CONCERNS CASE. ITA NO S . 3235 TO 3241/M/2013 3 6. HEARD BOTH SIDES, PERUSED THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. PERFECT SCALE COMPANY PVT. LTD. (SUPRA). WE FIND FROM THE ORDER OF THE CO - ORDINATE BENCH THAT THERE WAS A DELAY OF 513 DAYS AND CONSIDERING THE AFFIDAVIT FILED BY THE DIRECTOR AND REASONS THEREON, THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE WAS BONAFIDE IN NOT FILING THE APPEALS IN TIME. THE DELAY OF 513 WA S CONDONED OBSERVED AS UNDER: ALL THESE 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 DECISI ON OF THE MUMBAI BENCH TRIBUNAL IN THE CASE OF THE PHOENIX MILLS LTD., DECIDED IN ITA NO.6240/M/2007 VIDE 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 ASSESS EE 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 WERE FILED IMMEDIATELY. IT WAS EXPLAINED THAT ASSESSEE WAS NOT AWARE OF THE LEGAL PROVISION PROPERLY AND HE WAS UNDER BONAFIDE BELIEF THAT NO USEFUL PURPOSE WILL BE SERVED IF THE APPEALS ARE FILED AS ADVISED BY THE THEN CHARTERED ACCOUNTANT. IT WAS EXPLAINED THAT SIMILAR FACTS WE RE INVOLVED IN THE CASE OF THE PHOENIX MILLS LTD (SUPRA), AND THE TRIBUNAL HAS CONDONED THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. ON THE OTHER HAND, LEARNED DR STATED THAT THERE WAS NO REASONABLE CAUSE IN FILING THE APPEALS LATE BEFORE THE TRI BUNAL, THEREFORE, THE DELAY IN FILING THE AFORESAID APPEALS SHOULD NOT BE CONDONED. AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, I FOUND THAT THE ASSESSEE WAS BONAFIDE IN NOT FILING THE APPEALS IN TIME. COPY OF THE AFFIDAVIT OF T HE DIRECTOR OF THE COMPANY IS PLACED ON RECORD. IT HAS BEEN ITA NO S . 3235 TO 3241/M/2013 4 EXPLAINED THAT THE COMPANY RECEIVED THE ORDER OF CIT(A) DATED 1 10 2011 AND THE APPEAL SHOULD HAVE BEEN FILED BEFORE THE TRIBUNAL WITHIN 60 DAYS. IT IS FURTHER EXPLAINED THAT THE APPEAL MATTERS OF THE ASSESSEE WERE LOOKING AFTER BY MR. P.K.TANDON, CHARTERED ACCOUNTANT AND ON HIS ADVICE THE APPEALS WERE NOT FILED. HOWEVER, WHEN THE ASSESSEE TRANSFERRED THE CASE TO MR. S.S.GAJJA, CHARTERED ACCOUNT, WHO ADVISED THAT APPEALS ARE TO BE FILED BEFORE THE TRIBUNAL AS THE ORDER OF THE CIT(A) IS NOT AS PER THE PROVISIONS OF LAW. I NOTED THAT DUE TO WRONG ADVICE OF THE CHARTERED ACCOUNTANT, APPEALS COULD NOT BE FILED IN TIME, THEREFORE, I AM OF THE VIEW THAT THERE IS A REASONABLE CAUSE IN NOT FILING THE APPEAL S IN THE TIME. THE DECISION IN THE CASE OF THE 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 HONBLE APEX COURT IN THE CASE OF CONCORD OF INDIA INSURANCE CO. LTD. V S. SMT. NIRMALA DEVI AND OTHERS, REPORTED IN (1979) 118 ITR 507(SC), 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 PROPOS ITION THAT MISTAKE OF COUNSEL BY ITSELF IS ALWAYS A SUFFICIENT GROUND. ACCORDINGLY, THE HONBLE APEX COURT HAS HELD THAT THERE IS A MISTAKE OF THE COUNSEL AND, THEREFORE, THE DELAY IN FILING THE APPEAL HAS BEEN CONDONED. I FURTHER NOTED THAT SIMILAR FINDIN G HAS BEEN EXPRESSED BY THE HONBLE SUPREME COURT IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY, REPORTED IN AIR 1998 SC 3222. THE TRIBUNAL HAS ALSO CONSIDERED THE DECISION IN THE CASE OF MELA RAM AND SONS VS. ITA NOS.3228 TO 3234/2013 4 CIT, REPORTE D IN 29 ITR 607 (SC) AND ACCORDINGLY, THE DELAY IN FILING APPEAL WAS CONDONED. THE FACTS IN THE PRESENT CASE ARE ALSO SIMILAR AS IN THIS CASE ALSO DUE TO MISTAKE OF CHARTERED ACCOUNTANT THE ASSESSEE COULD NOT FILE THE APPEALS IN TIME. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE VARIOUS DECISIONS MENTIONED ABOVE, WHICH WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF THE PHOENIX MILLS LTD (SUPRA), I CONDONE THE DELAY IN FILING THE PRESENT APPEALS BEFORE THE TRIBUNAL FOR ALL THE Y EARS . ITA NO S . 3235 TO 3241/M/2013 5 7. IN TH E CASE ON HAND BEFORE US ALSO WHICH IS THE GROUP CONCERN, SIMILAR DELAY OF 513 DAYS HAD OCCURRED IN NOT FILING THE APPEAL S INITIALLY ON THE ADVICE OF THE TAX CONSULTANT. THE DIRECTOR FILED AN AFFIDAVIT STATING AS UNDER: AFFIDAVIT OF SHRI PRAMOD MENON, DIRECTOR OF M/S. SUDHA ORGANICS PVT. LTD., HAVING ITS OFFICE AT 1, DORF KETAL TOWER, ORLEM, MALAD (W), MUMBAI 400 064. (HEREINAFTER REFERRED TO AS AN APPELLANT) I, THE ABOVE NAMED DEPONENT, SOLEMNLY AFFIRM AND STATE I N THE MATTER OF INCOME TAX AP PEAL FOR THE ASSESSMENT YEAR 2003 04, AS UNDER: 1 . I AM THE DIRECTOR OF THE APPELLANT COMPANY AND I AM FULLY CONVERSANT WITH THE FACTS DEPOSED BELOW. 2 . A SEARCH U/S 132(1) OF THE I.T. ACT, 1961 WAS CONDUCTED ON 30/05/2008 BY DDI T UNIT V(3), MUMBAI, IN THE BUSINESS PREMISES OF DORF KETAL CHEMICALS (INDIA) PVT LTD. DORF KETAL CHEMICALS (INDIA) PVT LTD IS MAINLY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF SPECIALTY CHEMICALS. SINCE THE APPELLANT COMPANY IS WHOLLY OWNED SUBSIDIARY OF THE DORF KETAL CHEMICALS (INDIA) PVT LTD., THE BUSINESS PREMISES OF THE ASSESSEE COMPANY WAS AL SO SEARCHED U/S. 132(1) OF THE I9.T. ACT, 1961. 3 . THAT THE APPELLANT COMPANY, M/S. SUDHA ORGANICS PVT. LTD., DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2003 04 , RECEIVED RS. 12,00,000/ TOWARDS RENT FOR PLANT FROM ITS WHOLLY OWNED COMPANY M/S. DORF KETAL CHEMICALS (INDIA) PVT LTD WHICH WAS RETURNED AS INCOME UNDER THE HEAD INCOME FROM BUSINES . HOWEVER IN ASSESSMENT PROCEEDINGS PURSUANT TO SEC. 15 3A THE AO CONSIDERED THE SAME AS INCOME FROM HOUSE PROPERTY . THE SAME WAS ALSO CONFIRMED BY THE CIT APPEALS IN THE APPELLATE PROCEEDINGS. ITA NO S . 3235 TO 3241/M/2013 6 THAT APPELLANT COMPANY RECEIVED THE CIT APPEALS ORDER ON 1 10 11 & THE APPEAL WITH THE ITAT OUGHT TO HAVE BEEN FILED BY 31.10.11 BUT THE COMPANY HAS NOT FILED APPEAL WITH THE IT A T. THERE HAS BEEN DELAY OF 526 DAYS IN FILING THE APPEAL. THE FILES OF THE DORF KETAL GROUP COMPANIES WERE BEING HANDLED BY MR.P.K.TONDON CHARTERED ACCOUNTANT. ON HIS ADVICE APPEALS WERE FILED FOR DORF KETAL CHEMICALS (INDIA) PVT. LTD FOR A.Y 04 05 TO 06 07 ON 29 TH FEBRUARY 2012. AS PER HIS ADVICE, APPEALS WERE NOT FILED FOR SUDHA ORGANICS PVT. LTD & PERFECT SCALES CO. PVT. LTD. THEREAFTER, THE FILES HAVE BEEN TRANSFERRED TO S.S GAJJA & CO CHARTERE D ACCOUNTANTS WHO HAVE NOW ADVISED US TO FILE APPEAL, THERE BEING MERIT IN THE CASE OF THE APPELLANT. THE APPELLANT HUMBLY PRAYS THAT IN THE INTEREST OF JUSTICE THE DELAY IN FILING THE PRESENT AP PEAL BE CONDONED BY THE HONBLE TRIBUNAL AND THE APPEAL BE ADMITTED FOR HEARING. 8. FACTS AND CIRCUMSTANCES BEING SIMILAR AS THE DELAY OF 513 DAYS WAS CONDONED IN THE CASE OF PERFECT SCALES CO. PVT. LTD. , WE CONDONE THE DELAY IN THE CASE OF THE ASSESSE E M/S. SUDHA ORGANICS PVT. LTD. AND ADMITTING THE APPEALS FOR HEARING. 9. COMING TO THE MERIT OF THE CASE IN SO FAR AS THE ASSESSMENT YEARS 2003 - 04 TO 2006 - 07, THE APPEALS OF THE ASSESSEE WERE DISMISSED OBSERVING AS UNDER: 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, HOW EVER, 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 T HAT IN IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 2002 03, THE SHED WAS CONSTRUCTED WITH THE ITA NO S . 3235 TO 3241/M/2013 7 FUNDS BORROWED FROM THE HOLDING COMPANY. NO INTEREST HAS BEEN PAID TO THE HOLDING COMPANY ON THAT AMOUNT. IT IS FURTHER SEEN THAT SMALL AMOUNT WAS SPENT ON PL ANT AND MACHINERY I.E. RS.6 LAKHS OR O DD. RS.41,769/ AND RS.10,859/ OR ODD WAS SPENT FOR ELECTRICITY FITTING AND AIR CONDITIONER, RESPECTIVELY. AS STATED ABOVE, THE ASSESSEE NEVER USED THIS SHED FOR ITS OWN BUSINESS PURPOSE. WHEN THE SHED WAS CONSTRUCTE D, IMMEDIATELY THEREAFTER THE SHED WAS RENTED OUT TO THE HOLDING COMPANY ON AN ANNUAL RENT OF RS.6 LAKHS. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS EXPLOITED ITS BUSINESS ASSET FOR COMMERCIAL PURPOSE, THOUGH HONBLE SUPREME COURT IN THE CASE OF M/ S SHAMBHU INVESTMENT PVT. LTD. (SUPRA), ITSELF HAS CONCLUDED IN THE FOLLOWING MANNER : TAKING A SUM TOTAL OF AFORESAID DISCUSSIONS, IT CLEARLY APPEARS THAT MERELY BECAUSE INCOME IS ATTACHED TO ANY IMMOVABLE PROPERTY CANNOT BE THE SOLE FACTOR FOR ASSESS MENT OF SUCH INCOME AS INCOME FROM PROPERTY; WHAT HAS TO BE SEEN IS WHAT WAS THE PRIMARY OBJECT OF THE ASSESSEE WHILE EXPLOITING THE PROPERTY. IF IT IS FOUND, APPLYING SUCH TEST, THAT MAIN INTENTION IS FOR LETTING OUT THE PROPERTY, OR ANY PART THEREOF, THE SAME MUST BE CONSIDERED AS RENTAL INCOME OR INCOME FROM PROPERTY. IN CASE, IT IS FOUND THAT THE MAIN INTENTION IS TO EXPLOIT THE IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES, IN THAT EVENT, IT MUST BE HELD AS BUSINESS INCOME. IN THIS CASE THE HONBLE SUPREME COURT HAS HELD THAT IF IT IS FOUND THAT THE MAIN INTENTION IS TO EXPLOIT THE IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL 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 COMMER CIAL PURPOSES. IT IS ALSO SEEN THAT THE FACTORY SHED WAS CONSTRUCTED BY THE FUNDS OF THE HOLDING COMPANY AND WAS USED BY THE HOLDING COMPANY, WHICH SHOWS THAT THE BUSINESS ASSET CREATED BY THE ASSESSEE WAS ITA NO S . 3235 TO 3241/M/2013 8 ONLY FOR THE PURPOSE OF HOLDING COMPANY AND NOT US E OF ASSESSEE. HENCE, IT IS INFERRED FROM THE FACT THAT THE HOLDING COMPANY WAS THE OWNER OF THE SHED AS THE ASSESSEE IS A HUNDRED PERCENT SUBSIDIARY OF THE HOLDING COMPANY. THEREFORE, IT CANNOT BE SAID THAT THE BUSINESS ASSET WAS GIVEN ON RENT FOR EXPLOIT ATION OF THE IMMOVABLE PROPERTY BY WAY OF COMMERCIAL ACTIVITIES. ACCORDINGLY, I HOLD THAT THE AO AND LEARNED CIT(A) WERE JUSTIFIED IN TREATING THE RENTAL INCOME AS INCOME FROM HOUSE PROPERTY. ACCORDINGLY APPEALS FOR ASSESSMENT YEARS 2003 04 TO 2006 07 ARE DISMISSED . 10. IN SO FAR AS THE APPEALS FOR THE ASSESSMENT YEAR 2007 - 08 TO 2009 - 10, IT WAS HELD THAT NO NOTIONAL INCOME CAN BE COMPUTED AS PER THE PROVISIONS OF SEC. 23(1) OF THE ACT ON THE BUSINESS ASSET THEREFORE ALLOWED THE APPEALS OF THE ASSESSEE OBSERVING AS UNDER: FOR ALL THE THREE ASSESSMENT YEARS, NO RENTAL INCOME WAS RECEIVED AS THE SHED WAS NOT USED BY HOLDING COMPANY. HOWEVER, THE AO WAS OF THE VIEW THAT IF THE RENTAL INCOME IS NOT RECEIVED BUT THE SAME HAS ACCRUED THE ASSESSEE. ACCORDINGL Y, HE ASSESSED THE RENTAL INCOME OF RS.6 LAKHS EACH FOR ALL THE THREE YEARS. THE CIT(A) ALLOWED PARTLY RELIEF TO THE ASSESSEE AS IN HIS VIEW THE ALP HAS TO BE DETERMINED ON THE BASIS OF EARLIER RENTAL INCOME AS REQUIRED UNDER SECTION 23(1) OF THE ACT. A CCORDINGLY, THE AO WAS DIRECTED TO RECOMPUTE THE RENTAL 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 A LREADY 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). ACCORDI NGLY, THE APPEALS OF ALL THE THREE YEARS ARE ALLOWED BY HOLDING AS ABOVE . ITA NO S . 3235 TO 3241/M/2013 9 11. WE ARE IN COMPLETE AGREEMENT WITH THE DECISION IN THE CASE OF PERFECT SCALES CO. PVT. LTD. AND BY ENDORSING THE SAID VIEW, WE DIRECT THE AO NOT TO ASSESS NOTIONAL INCOME U/S. 23(1) OF THE ACT IN RESPECT OF THE SHED USED FOR BUSINESS ASSET DURING THE ASSESSMENT YEARS 2007 - 08 TO 2009 - 10. THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2003 - 04 T O 2006 - 07 IN ITA NOS. 3235 TO 3238/M/2013 ARE DISMISSED AND APPEALS FOR ASSESSMENT YEARS 2007 - 08 TO 2009 - 10 IN ITA NOS. 3239 TO 3241/M/2013 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY , 201 6 . SD/ - SD/ - ( RAJESH KUMAR ) ( C.N. PRASAD ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI ; DATED : 10 TH FEBRUARY , 201 6 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI