ACIT 9(3), MUMBAI V. STATIONERY POINT INDIA LTD, MUMBAI

ITA 8054/MUM/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3659 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 16-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 23-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN
• Keywords: Unexplained cash credit; Depreciation; Additional evidence; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SANJAY ARORA , A M AND SHRI PAWAN SINGH, JM ./ I.T.A. NO. 8054/MUM/2010 ( / ASSESSMENT YEAR: 2005 - 06 ) ASST. CIT - 9(3) , 2 ND FLOOR, ROOM NO. 229, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. STATIONERY POINT INDIA LTD. A - 7/60, SARAF CHOUDHARY NAGAR, THAKUR COMPLEX, KANDIVALI (E), MUMBAI - 400 101 ./ ./ PAN/GIR NO. AAFCS 3137 G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI MOHAMMED RIZWAN / RESPONDENT BY : SHRI HARESH P. SHAH / DATE OF HEARING : 17.5.2016 / DATE OF PRONOUNCEMENT : 12 .8.2 016 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE REVENUE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 20 , MUMBAI (CIT(A) FOR SHORT) DATED 21.9.2010 , PARTLY ALLOWING THE A SSESSEES APPEAL CONTESTING ITS A SSESSMENT U/S.143(3) R/W S. 254 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2005 - 06 VIDE ORDER DATED 30.12.2009. 2 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. 2. T HE INSTANT APPEAL RAIS ES TWO ISSUES PER ITS TWO E FFECTIVE GROUNDS, WHICH WE SHALL TAKE UP IN SE RIATI M . THE FIRST IS IN RELATION TO THE DELETION OF THE ADDITION U/S. 68 OF THE ACT IN THE SUM OF RS. 70.43 L ACS. THIS IS THE SECOND ROUND BEFORE THE T RIBUNAL, WHICH RESTORED THE MATTER FOR FRESH ASSESSMENT BACK TO THE FILE OF THE A SSESSING O FFICER (AO) IN THE F IRST INSTANCE I N VIEW OF THE ASSESSEE FILING ADDITIONAL EVIDENCES BEFORE, WHICH THOUGH HAD NOT BEEN ADMITTED BY , THE FIRST APPELLATE AUTHORITY. THE ADDITION WAS ON ACCOUNT OF S H A R E APPLICATION MONEY RECEIVED FROM VARIOUS PERSONS. THE AO WAS OF THE VIEW THA T THE DETAILS FILED BY THE ASSESSEE WERE ONLY REPRODUCTION OF THAT FILED EARLIER, AND IT DID NOT PROVE THE CAPACITY OF THE CREDITORS OR THE GENUINENESS OF THE CREDIT TRANSACTIONS. HE, ACCORDINGLY, CONFIRM ED THE ADDITION, MADE AT RS.80.43 L ACS V IDE ASSESSME NT DATED 28 . 12 . 2007, I.E., EXCEPT FOR RS. 10 L ACS CREDIT ED TO THE ACCOUNT OF M /S. PUSHK A RAJ PACKAGING INDIA (P.) LTD. , IN VIEW OF THE BALANCE - SHEET AND THE RETURN OF INCOME OF THAT COMPANY, EVIDENCING THE PAYMENT, INCLUDING ITS SOURCE. IN APPEAL, THE L D. CIT(A) FOUND THAT THE ASSESSEE HAD FILED CONFIRMATIONS, BEARING VERIFIABLE ADDRESSES, FROM ALL THE SHAREHOLDERS, WH ICH WERE NOT PURSUED BY THE AO, WHO ONLY RELIED ON HIS FINDINGS IN THE ORIGINAL ASSESSMENT ORDER TO ARRIVE AT HIS CONCLUSION S , REPRODUCING T HE M I N EXTENSO . THE ADDITION BEING DELETED THUS, THE REVENUE IS IN APPEAL, RAISING THE FOLLOWING G ROUND: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.70,43,000 MADE BY THE ASSESSING O FFICER U/S. 68 OF THE I. T. ACT, 1961, AS UNEXPLAINED CASH CREDITS, WITHOUT APPRECIATING THAT ADEQUATE FACTS HAVE BEEN BROUGHT ON RECORD TO SHOW THAT THE IDENTITY OF THE CREDITORS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION HAVE NOT BEEN EST ABLISHED DESPITE SUFFICIENT OPPORTUNITIES GIVEN. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. 3 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. THE ISSUE ARISING, THUS, IS IF THE MATERIAL S AS ADDUCED BY THE ASSESSEE ARE ADEQUATE TO PROVE THE IMPUGNED CREDITS, DETAILED AS UNDER, A S TO THE IR NATURE AND SOURCE , IN TERMS OF SECTION 68 OF THE A CT: NAME NO. OF SHARES AMOUNT (RS.) (1) COMPANIES (I) SAAVI PACKERS & PRINTERS P. LTD. 1,20,000 12,00,000 (2) DIRECTORS (I) MR. SHANKER KASHID [DIRECTOR] 4,51,200 45,12,000 (II) MRS. S HARMILA KASHID [WIFE] 1,900 19,000 (III) M/S. PUSHKARAJ CORPORATION [P ROP. SHARMILA K ASHID] 11,900 1,19,000 (IV) MR. PAUL D. MACWAN 1,900 19,000 (3) OTHERS - 63 INDIVIDUALS 1,17,400 11,74,000 TOTAL 7,04,300 70,43,000 T HE SAME, AS IS WELL - SETTLED, REQ UIRES THE CREDIT BEING PROVE D ON THE PARAMETERS OF IDENTITY AND CAPACITY OF THE CREDITOR, AND THE GENUINENESS OF THE CREDIT. AS SHALL BE APPARENT, THE FAILURE TO DO SO QUA THE L A TTER T W O FORMS THE BASIS OF THE NON - ACCEPTANCE OF THE ASSESSEE S EXPLANATION B Y THE AO, WHI LE THE LD. CIT(A) CONSIDERS THE SAME AS PRIMA FACIE ESTABLISHED, SATISFACTORILY EXPLAINING THE SAME. THE DOCUMENTS FURNISHED IN SUPPORT OF ITS CASE BY THE ASSESSEE ARE AS UNDER: I. STATEMENT SHOWING DETAILS OF SHARE APP LICATIONS LIKE NAME & ADDRESS OF THE SHAREHOLDERS, NO. OF SHARES WITH VALUE, PAN WHEREVER AVAILABLE AND RELATIONSHIP. II. ATTENDANCE DETAILS FROM FINANCIAL YEAR 200 1 - 05 TO 2008 - 09 (TILL AUGUST, 2008) OF EMPLOYEES WHO HAD SUBSCRIBED THE SHARES. III. MUSTER ROLL OF EMPLOYEES FOR THE PERIOD FROM APRIL, 2001 TO MARCH,2005 AND FOR THE MONTH OF AUGUST, 2008, SHOWING THEIR DAILY ATTENDANCE . IV. CONFIRMATION L ETTER, COPIES OF SHORE APPLICATIONS , COPIES OF INCOME TAX RETURN OF SHRI SHA NKAR KASHID (DIRECTOR) . 4 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. V. CONFIRMATION LETT ER, COPIES OF SHARE APP L ICATIONS , COPIES OF INCOME TAX RETURN OF M/S SAAVI PACKERS & STATIONERY P LTD. VI. CONFIRMATION LETTER, COPIES OF SHARE APPLICATIONS, COPIES OF INCOME TAX RETURN OF M / S . PUSHKARA J PACKAGING INDIA P LTD. VII. CONFIRMATION LETTER, COPIES OF SHARE AP PLI CATIONS , COPY OF RELEVANT BANK STATEMENT OF M / S PUSHKARAJ CORPORATION, PROP MRS SHARMILA K ASHID . VIII CONFIRMATION LETTERS , COPIES OF SHARE A PPLIC AT IONS OF OTHERS INCLUDING EMPLOYEES . CONFIRMATIONS , BY THE MSELVES DO NOT PROVE THE CREDIT ( R EFER : BHARATI P. LTD. V. CIT (1978) 111 ITR 951 (CAL); CIT V. W. J. WALKER & CO. , (1979) 117 ITR 690, 694 (CAL); CIT V. UNITED COMMERCIAL & INDUSTRIAL CO. (P.) LTD. , (1991) 187 ITR 596, 599 (CAL). THE ASSESSEE IS AN UNLISTED COMPANY, WHOSE SHARES ARE, THEREFORE, IL LIQUID. THERE IS NOTHING ON RECORD TO SHOW THAT THE SHARE SUBSCRIPTION HAD BEEN SOUGHT IN THE COURSE OF RAISING SHARE CAPITAL FROM THE PUBLIC, OR BY WAY OF PRIVATE PLACEMENT, FILING THE REQUISITE DETAILS (VIZ . P ROSPECTUS OR , AS THE CASE M AY BE, S TATEMENT IN L IE U OF P ROSPECTUS , ETC. ) WITH THE CONCERNED R EGISTRAR OF C OMPANIES. APART FROM EX HIBITING ITS GENUINENESS , I.E., AS A ATTEMPT TO RAISE CAPITAL FROM THE PUBLIC F O LL OW ING THE DUE PROCESS OF LAW, IT SERVES TO INFORM THE PROPOSED INVESTOR (SHAREHOLDER) OF THE PURPOSE FOR WHICH THE CAPITAL IS BEING RAISED. THE COMPANY CAN SUBSEQUENTLY BE QUESTIONED IN ITS RESPECT. COULD THE SHARES ISSUED BE REGARDED AS SO IN ITS ABSENCE? BE THAT AS IT MAY, THE SHARES BEING NOT MARKETABLE, AND THE INVESTME NT THUS NOT LIQUID, A PERSON WHO IS NOT A PROMOTER, OR A CONCERN BELONGING TO HIM, AS , SAY, PUSHKARAJ CORPORATION P. LTD., THE PROPRIET ARY CONCERN OF SHARMILA KHASID, THE PROMOTERS WIFE, WOULD ORDINARILY HAVE NO REASON TO INVEST THEREIN, BEING , RATHER, CO NTRARY TO THE NORMAL, NATURAL HUMAN BEHAVIOR AND CONDUCT. THEY ARE AFTER ALL PARTING WITH THE IR FUNDS AS INVESTORS, IN THE HOPE OF AND ON THE PR E MISE OF A PROSPECTIVE GAIN, AND NOT AS CHARITY. THE TEST OF HUMAN PROBABILITIES IS FULLY APPLICABLE TO THE PROC EEDINGS UNDER THE A CT 5 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. (REFER : CIT VS. DURGA PRASAD MORE [1971] 82 ITR 540 (SC) AND S UMA TI DAYAL VS. CIT [1995] 214 ITR 801 (SC ) ). THEY, T HEN, NEED TO B E SA TISFIED ABOUT THE F UTURE P ROSPECTS OF THE C OMPANY, AND TOWARD W HICH T HERE I S N OTHING ON R ECORD, A GAIN I MPINGING DIRECTLY ON THE GENUINENESS OF THE CREDIT/ S . THIS, ONCE AGAIN, UNDERSCORES THE PRIMACY OF THE PROSPECTUS/STATEMENT IN LIEU OF PROSPECTUS. FURTHER, THERE IS ADMITTEDLY NO MA TERIAL TO ESTABLISH THE CREDITWORTHINESS OF THE 6 4 INDIVIDUALS, INCLUDING , AS STATED, 3 0 EMPLOYEES, FROM WHOM CASH ( AT A MAXIMUM OF RS.19,000/ - EACH, IN THEIR NAME S ) HAS BEEN ACCEPTED. WHAT IS THE I R FINANCIAL CAPACITY? WHAT ARE THE IR REGULAR SOURCE S OF INCOME? WHAT IS THE I R INCOME FOR THE PAST 2 - 3 YEARS? ANSWERS TO THESE AND LI KE QUESTIONS ARE CONSPICUOUS BY THEIR ABSENCE, CONSIDERING ALSO THE MATERIAL ON RECORD , WHICH IN FACT ONLY FORMS A PART OF THE ASSESSEES EXPLANATION QUA THE CREDIT/S. THE ADDITION OF RS.11.93 L ACS, REPRESENTING CREDIT S THERE - FROM, IS ACCORDINGLY CONFIRMED . FOR THE BALANCE CREDITS, THE SAME ARE O STENSIBLY FROM RELATED PARTIES , AND IN RESPECT OF WHOM THE ASSESSEE HAS FILED, BESIDES CONFIRMATIONS, COPIES OF TAX RETURN S , AND WHICH AGAIN APPEAR TO BE FOR THE CURRENT YEAR ONLY, WHILE THE PAYMENT, IN ALL PROBABIL ITY, WOULD STAND MADE FROM ACCUMULATED CAPITAL; THE CURRENT YEARS INCOME BEING UNCERTAIN AND, BESIDES, PRESUMABLY UN - REALI Z ED AT THE RELEVANT TIME. ALSO WOULD BE RELEVANT IS IF THE SHARES WERE INDEED ISSUED, AND WHEN ? T HIS IS AS W HERE NOT ISSUED, A GENUIN E INVESTOR SHALL, EXCEPT IN CASE OF A TACIT UNDERSTANDING OF THE MONEY BEING GIVEN FOR GOOD, RECALL HIS MONEY BACK. THE MATERIAL FURNISHED BY THE ASSESSEE IS THUS HARDLY ADEQUATE FOR PROVING THE GENUINENESS (OF THE CREDIT/ S ) AND /OR THE CAPACITY OF THE CR EDITORS. THE AO, AS OBSERVED BY THE LD. CIT (A) , HAS ALSO NOT EXAMINE D OR S OUGHT ANY FURTHER MATERIALS IN THE MATTER. WE, ACCORDINGLY, VACATING THE FINDINGS OF BOTH IN RELATION TO THE CREDIT FOR THE BALANCE RS.58.50 L ACS, RESTORE THE MATTER BACK TO THE FILE OF THE AO TO ENABLE THE ASSESSEE TO, ONCE AGAIN, ESTABLISH THE CREDIT /S ON THE AN VIL OF SECTION 68 OF THE A CT. WE DECIDE ACCORDINGLY, AND THE R EVENUE GETS PART RELIEF. BEFORE PARTING, WE MAY ALSO NOTE THE ASSESSEES RELIANCE ON THE ORDER BY THE T RIBUNAL F OR A.Y. 2006 - 07 ( IN ITA NO. 1162/M UM /2010 DATED 18 . 4 . 2012/PB P G S . 1 - 6 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. 18). WHETHER OR NOT AN ASSESSEE HAS SATISFACTOR IL Y EXPLA INED THE GENUINENESS OF THE CREDIT IS PRINCIPALLY A MATTER TO BE DECIDED ON THE BASIS OF THE EXPL ANATION /S FURNISHED A S REGARDS THE NATURE AND SOURCE OF THE IMPUGNED CREDIT /S (WHICH IN THE PRESENT CASE STANDS CREDITED TO THE SHARE APPLICATION MONEY ACCOUNT), TOGETHER WITH EVIDENCES LED IN SUPPORT. THAT IS, IS A FINDING OF FACT . IN OTHER WORDS, WHETHER THE BURDEN OF PROOF, WHICH IS ON T HE ASSESSEE - RECIPIENT , THE BENEFICIARY, STANDS DISCHARGED OR NOT IS ESSENTIALLY A MATTER OF FACT. THE TRIBUNAL AS A FINAL FACT FINDING AUTHORITY FOUND IT TO BE SO IN THAT CASE, ENDORSING THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. THE LD. CIT(A) IN THE PRESENT CASE HAS FOUND THAT THE ASSESSEE HAD FURNISHED ADEQUATE MATERIALS, DISCHARGING THE BURDEN OF PROOF ON IT, AND THAT THE AO HAD NOT MADE ANY E NQUIRY FALSIFYING THE SAME. IN OUR VIEW, THE MATERIAL IS GROSSLY INADEQUATE IN THE CASE OF INDIVIDUALS, BEIN G WITHOUT STATING THEIR INCOMES ; SOCIAL AND EDUCATIONAL BACKGROUND IMPINGING ON THE GENUINENESS OF THE CREDIT; SHARE APPLICATION FORMS ; BANK ACCOUNTS ; FINANCIAL CAPACITY, SOME OF WHOM ARE STATED TO BE THE ASSESSEES EMPLOYEES, STATED TO HAVING GIVEN CASH TO THE ASSE SSEE (AT IS AT A MAXIMUM OF RS.19, 000 / - , I.E., JUST BELOW THE LIMIT AS PRESCRIBED U /S. 269 SS FOR THE RECEIPT OF MONEY IN CASH ) . WHY, EVEN THE REASON FOR MAKING AN ILLIQUID INVESTMENT HAS NOT BEEN STATED? IT IS ALSO NOT CORRECT TO SAY THAT T HE A O IS NOT ENTITLED TO REJECT THE EXPLANATION WITHOUT SOME OTHER POSITIVE EVIDENCE FALSIFYING THE ASSESSEES CASE. THE TRUE VIEW IS THAT, WHILE THE A.O. IS NOT BOUND TO ACCEPT AS TRUE ANY POSSIBLE EXPLANATION WHICH THE ASSESSEE MAY PUT FORTH, HE CANNOT ALSO ARBITRARILY REJECT THE ASSESSEES EXPLANATION [ SRIRAM JHABARMULL (KALIMPONG) LTD. VS. CIT (1967) 64 ITR 314 (CAL). ALSO SEE, AKBERALLY ESUFALLY VS. CIT (1966) 60 ITR 563 (MAD); HAZARILAL VS. CIT, (1963) 47 ITR 516 (AP); HOMI JEHANGIR GHEESTA VS. CIT (1961) 41 ITR 135, 142 (SC); M. M. A. K. MOHIDEEN THAMBY & CO. VS. CIT (1959) 36 ITR 481 (AP); BACHHRAJ AMOLAKCHAND VS. CIT, (1956) 29 ITR 1009 (NAG); R. B. N. J. NAIDU VS. CIT, (1956) 29 ITR 194 (NAG); LAL MOHAN KRISHNA LAL PAUL VS. CIT (1944) 12 ITR 441 (CAL); ANIL KUMAR SINGH VS. CIT, (1972) 84 ITR 307 (CAL)]. THE GENUINENESS OF THE TRANSACTION HAS ITSELF BE ING FOUND AS 7 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. SERIOUSLY WANTING. FOR THE BALANCE CREDITS F OR RS.58.50 L ACS, THE ASSESSEE GIVING PARTIAL DETAILS/MATERIALS, SO THAT A VIEW, ONE WAY OR THE OT HER , COULD NOT BE ADOPTED, WE HAVE RESTORE D THE MATTER BACK TO THE FILE OF THE AO, BEFORE WHOM THE ASSESSEE SHALL FURNISH ALL THE MATERIAL IT WISHES TO RELY UPON IN THE MATTER. THIS, WE MAY CLARIFY, IMPLIES THAT THE REAL OR THE ACTUAL SOURCE OF THE SUM OF MONEY, OF WHICH THE ASSESSEE IS FOUND TO BE THE BENEFICIARY, AS EVIDENCED BY THE CREDIT IN ITS RESPECT IN ITS BOOKS OF ACCOUNT , A ND NOT THE OSTENSIBLE SOU RCE , AND WHICH MAY REQUIRE AN INVESTIGATION INTO OR EXAMINATION OF THE MONEY TRAIL . WHY, IF THAT BE SO, THE MERE CREDIT IN THE ASSESSEES BOOKS OF ACCOUNT IN THE NAME OF ANOTHER SHO ULD BE SUFFICIENT TO ACCEPT IT AS A GENUINE CREDIT ( CIT VS. S. KAMARAJA PANDIAN [1984] 150 ITR 703 (MAD) , SLP AGAINST WHICH STANDS DISMISSED IN 1 5 5 ITR (S T. ) 66 ) . A REPRODUCTION FROM THE SAME WOULD BE ELUCIDATIVE: UNDER SECTION 68 OF THE INCOME - TAX ACT, 1961, THE ASSESSEE HAS TO ESTABLISH THE IDENTITY OF THE CREDITOR, THE CAPACITY O F THE CREDITOR TO ADVANCE THE LOAN AND THE GENUINENESS OF THE TRANSACTION IN SPITE OF THE ENTRIES TO THAT EFFECT IN THE ACCOUNT BOOKS AND I F THE ASSESSEE DOES NOT OFFER ANY EXP LANATION ABOUT THE NATURE AND SOURCE OF THE CASH CREDITS OR THE EXPLANATION OFFERED IS NOT SATISFACTORY, THEN THE CASH CREDIT MAY BE CHARGED TO INCOME - TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. ONLY AFTER THE ASSESSEE PRIMA FACIE ESTABLISHES THESE THINGS, THE ONUS SHIFTS TO THE DEPARTMENT , BUT WHERE THE ASSESSEE MERELY ESTABLISHES THE IDENTITY OF THE CREDITOR AND NOTHING MORE, THE CASH CREDITS CAN BE TREATED AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. [EMPHASIS, OURS] UNLESS THE GENUINENESS OF TH E SOURCE OF THE SUM OF MONEY FOUND CREDITED IN THE ASSESSEES BOOKS IS SATISFACTORILY ESTABLISHED, THE ASSESSEE CANNOT BE SAID TO HAVE DISCHARGED THE REQUISITE BURDEN OF PROOF PLACED ON HIM U/S. 68. 5. THE ONLY OTHER ISSUE, AGITATED PER ITS G ROUND 2 BY T HE ASSESSEE, IS WITH REGARD TO THE RESTRICTION OF DEPRECIATION QUA MACHINERY INSTALLED DURING THE FIRST HALF OF THE RELEVANT PREVIOUS YEAR TO 50% OF THE NORMAL DEPRECIATION ON THE GROUND OF IT BEING PU T TO USE FOR LESS THAN 180 DAYS DURING THE RELEVANT PRE VIOUS YEAR. THE ASSESSEES - ON WHOM THE BURDEN OF PROOF LIES, CASE BEFORE US WAS THAT THE MACHINERY WAS PU T TO TRIAL 8 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. PRODUCTION BEFORE 30. 9 . 2004 AND, THUS, WAS PUT TO USE FOR OVER 180 DAYS DURING THE RELEVANT YEAR. 6. WE HAVE HEARD THE PARTIES, AND PERUS ED THE MATERIAL ON RECORD. WITHOUT DOUBT, BEING DEPLOYED IN TRIAL PRODUCTION WOULD QUALIFY AS BEING PUT TO USE FOR THE PURPOSES OF THE BUSINESS. THERE IS, H OWEVER, ADMITTEDLY NO CONTEMPORANEOUS MATERIAL TO ESTABLISH THE SAME. IT IS ALSO PERTINENT TH AT TRIA L PRODUCTION C OULD BE CAUSED ONLY UPON SUCCESSFUL COMMISSIONING OF ALL THE DIFFERENT PARTS OF THE PLANT, STATED TO BE A LAMINATION PLANT , I.E., IN THE MAIN. THE TRIAL PRODUCTION EXPENSES, INCLUDING WASTAGES , WOULD ALSO STAND TO BE CAPITALI Z ED, OF WHICH THE RE IS NO REFLECTION. IN VIEW OF THE FOREGOING, WE THEREFORE HAVE NO HESITATION IN UPHOLDING THE INFERENCE OF THE ADDITIONS TO THE MACHINERY BEING PUT TO USE FOR LESS THAN 180 DAYS DURING THE RELEVANT YEAR AND, THUS, EXIGIBLE TO DEP RECIAT ION AT 50% OF THE N ORMAL RATE. THE LD. CIT(A) STATING THAT THIS IS A NON - ISSUE AS THE ASSESSEE WOULD IN ANY CASE STAND TO AVAIL DEPRECIATION F ROM THE YEAR F O LL OW ING, IS NEITHER HERE NOR THERE. AND, THEREFORE , ONLY NEEDS TO BE STATED TO BE REJECTED. EACH YEAR IS AN INDEPENDEN T UNIT OF ASSESSMENT, AND THE FACT I N ISSUE IS IF THE RELEVANT M ACHINERY HAD BEEN PUT TO USE FOR THE REQUIRED PERIOD DURING THE RELEVANT PREVIOUS YEAR , SO AS TO ENABLE THE ASSESSEE TO ITS CLAIM , AS MADE , OR IS THE SAME NOT IN ACCORDANCE WITH LAW . THAT IS THE ONLY QUESTION THAT IS REQUIRED TO BE ADDRESSED, AND THE FURTHER QUESTION THAT IF IT WAS IN FACT PUT TO USE DURING THE RELEVANT YEAR IS A DMITTED BY BOTH THE PARTIES. WE DECIDE ACCORDINGLY, AND THE R EVENUE SUCCEEDS. 7. IN THE RESULT, THE APPEAL BY THE R EVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 12 , 201 6 SD/ - SD/ - ( PAWAN SINGH ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 12 . 0 8 .201 6 9 ITA NO. 8054/MUM/2010 (A.Y. 2005 - 06) ASST. CIT VS. STATIONERY POINT INDIA LTD. . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI