TMI Blog1994 (11) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... . Whether the Appellate Tribunal was right in holding that the assessee was entitled to have set off of carry forward losses of the earlier years against the income of the assessment year 1975-76 ? 4. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that interest of Rs. 4,53,710 being the interest on money taken on fixed deposits for paying the estate duty on the estate of late Sri Anantharamakrishnan should be allowed as a deduction ? 5. Whether the Appellate Tribunal was right in holding that deduction under section 80M should be allowed on the gross dividend income and not on the net dividend income having regard to the provisions of section 80AA of the Income-tax Act, 1961 ? " The first three questions are covered by the judgment of this court in CIT v. Amalgamations (P.) Ltd. [1977] 108 ITR 895. The fourth question is answered against the Department in our judgment delivered today, in Tax Cases Nos. 1109 to 1113 and 1180 of 1979 (Amalgamations (P.) Ltd. v. CIT). The fifth question is covered by the judgment of the Supreme Court in Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120. The questions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1970-71 and 1971-72, the main is, " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the estate duty paid by the assessee-company in respect of the properties which passed on the death of Sri Anantharamakrishnan was an admissible deduction under section 37 of the Incometax Act, 1961 ? " Was the alleged borrowing by the assessee-company for the purpose of paying the duty and is the deduction of the interest amount paid on the sums of the said borrowing permissible ? " is the other question. The Tribunal has made the statement of the case as agreed to between the parties in some detail but for the purpose of the present references, we are required to cull out only such facts that we think are essential and relevant. The assessee is a holding company holding shares in various subsidiary companies. Anantharamakrishnan, who had shares in some companies and other assets, was holding so much of shares in the assessee-company that the Income-tax Officer in his order has claimed him one, who held all the shares of the assessee-company. (However fractional or marginal the shares may be, but there should at least be one more pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a deduction under section 37 of the Income-tax Act, 1961. This case has a chequered history of its own in the sense that the claims of deduction as expenditure wholly and exclusively for the purposes of the business of the assessee-company have fallen for consideration in the instant proceeding only, but the estate duty proceedings had taken the shape of a case of a contest by one of the legal representatives of the deceased Anantharamakrishnan after payment of duty by the assessee-company and the matter at that stage was considered by a Division Bench of this court which found no merit in her case for a review of the order of assessment and the Supreme Court confirmed the said order of this court. The facts stated in the judgment of this court in Kalyani Sundaram v. Asst. CED [1980] 126 ITR 615 disclose that Anantharamakrishnan died intestate in Madras on April 18, 1964, leaving behind him his widow by name, Valli, his two sons by name, Sivasailam and Krishnamoorthy, and two daughters, Kalyani and Seetha. Kalyani, who became entitled on the death of Anantharamakrishnan to a one-fifth share in his estate under the provisions of the Hindu Succession Act, gave power of attorne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manner laid down in rule 15 which has been framed by the Board under the power given to it by section 20(1)(e). Since rule 15 of the Controlled Companies Rules is part of the scheme of section 17, the controlled company, viz., Messrs. Amalgamations Private Ltd., has to be treated as an accountable person. Hence, the controlled company was required to furnish an account in its capacity as an accountable person under section 19(1). " " In response to the notice issued, the company rendered an account on October 8, 1965, admitting therein the shares held by the deceased in Messrs. Amalgamations Private Ltd. and other allied concerns as also the amount due to the estate by Messrs. Amalgamations Private Ltd. and other allied concerns as also the amount due to the estate by Messrs. Amalgamations Private Ltd. The account rendered by the company was incomplete. " After referring to certain assets and liabilities, which were shown in the account, and after observing that the principal value of the assets were not given in the account, it was added : " In the covering letter, however, the company pointed out, ' we have long back intimated about the company being a controlled company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory and is only one of the methods suggested with a view to arriving at the fair market value cannot be accepted. " The Assistant Controller, however, rejected the plea that rule 15 aforementioned could be applied only to a case where section 17(1) was applied, and held that if the conditions prescribed in rule 15 were satisfied, it could be applied even independently of section 17(1). Kalyani Sundaram's husband, as her agent, wrote to the Assistant Controller seeking certain clarifications regarding the assessment. On June 25, 1974, the Assistant Controller in his reply referred to the authority given by Kalyani Sundaram to Shri Sivasailam and also the specific agreement to abide by the accounts rendered by him and to be bound by the explanations given by him and regretted his inability to furnish the particulars called for by Kalyani Sundaram's husband and referred him, for any particulars, to Sri Sivasailam, who was the person authorised by him. On January 2, 1975, Kalyani Sundaram's husband, as her agent, filed an application purporting to be under section 61 of the Act. He stated that a scrutiny of the assessment order showed that Messrs. Amalgamations Private Ltd. had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut who the accountable person is, so that he could proceed against him. At that stage, he could only look into the question whether there was any transfer of property to a controlled company by the deceased. Whether there was a benefit to the deceased is not a matter which will always be apparent or lie on the surface. The type of persons against whom this provision is designed do not always act in the open. To require the Assistant Controller to invoke the provisions only after he finds : (1) transfer of property ; and (2) enjoyment of benefit, would practically render the provisions useless. Such a view would also open up vistas of tax evasion as a person would then have only to transfer properties to, and exercise control over, the company without disclosing any tangible benefits to him to avoid its application. These aspects cannot be lost sight of in construing section 17 and the rules. When once there is a finding or information on the question of transfer of property by the deceased, then the Assistant Controller can treat the company as an accountable person. He would have to go into the question of benefits accruing to the deceased from the company in the course of furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n whether the assessment in this case is one made under section 17(1) of the Act. Lastly, there is the question whether Amalgamations can be rendered liable under the assessment as an accountable person. On the first question there never was any doubt in the mind of any one concerned with this assessment that Amalgamations was a controlled company. It is a private company, and not a company in which the public are substantially interested. It is a holding company, and not a subsidiary of another. And it has always been under the control of not more than five persons at a time. The statutory definition, therefore, fits it to perfection. A controlled company under the Estate Duty Act may come in for discussion in estate duty proceedings in one of two ways. An individual might die possessed of shares in a controlled company, and in the context of an assessment to estate duty of the properties passing on his death, which would include those shares as well, a question might arise touching the valuation of such shares. The Act and some of the Rules made thereunder have provided for a special formula for valuation of controlled company shares, familiarly known as the ' break-up value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the deceased's death. The ratio between the two, namely, the deceased's benefit and the company's income, is then applied to the value of the net assets of the company. If, for instance, the value of the benefits amounts to half the net income of the company, then one-half of the company's assets is regarded as the measure of the property liable to estate duty. Further, the duty so determined is declared under the statute to be a first charge on the company's own assets. The Act accordingly makes provision for treating the company itself as an accountable person to the extent that liability is fixed on the company by an application of the special provisions of section 17. " One interesting aspect of the argument before the Bench, however, is stated in the judgment of Balasubramanyan J., in these words : " This brief discussion of the nature and pattern of assessments under section 17 leads to the next aspect of the inquiry in this case, namely, whether the assessment in question was one made under that section. This was the point which the learned Advocate-General argued for the petitioner. But the point was robbed of much of its controversy when the assessment order, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson are chargeable to estate duty on their principal value (see section 5 read with section 3(3)). All properties so passing or deemed to pass shall be aggregated so as to form one estate, and duty is leviable on a graduated scale on the principal value of the estate (section 34(1)). The principal value of any dutiable property shall ordinarily be its market value (see section 36). As for shares held by a deceased shareholder in a controlled company, their valuation is to be governed by prescribed rules (see section 20(e)). The Rules prescribe the break-up value method for valuation of shares in controlled companies (see rule 15 of the Controlled Companies Rules). Every incorporated company is under a duty to furnish particulars of the interest held by a deceased person in its share capital or debentures (see section 84). Besides, every company to which a deceased had made a transfer of property within the meaning of section 17 has to furnish statements of such particulars as the Controller requires by notice (see section 55). For the purposes of all these provisions, section 2(12A) defines an accountable person, or its variant ' person accountable ', as including every person in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the general. I do not see how this rule of the special overriding the general can at all be applied in a case such as the present where section 19(1)(a) cannot apply at all. If we once rule out section 19(1)(a) altogether as inapplicable, what remains for application is only one provision, namely, section 2(12A). It is only in a competition between two provisions, one general and one special, that we are obliged to choose the latter and under that well-known rule of construction. But where we have on hand only one provision, we have to see whether it applied or not. Section 19(1)(a) may be a special provision, where both that provision and section 2(12A) might come in for application. But, on the facts of this case, when section 19(1)(a) does not enter into the reckoning at all, there is no question of reading section 2(12A) as a general provision. The next point urged by the learned Advocate-General was that the Assistant Controller, for his part, however, had not relied on section 2(12A). He cited the following passage from the assessment order to show that the Assistant Controller was under the mistaken impression that the company could be rendered accountable under section 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eased made a transfer of that property to the controlled company and benefit accrued to the deceased in the three years ending on his death. The slice of the assets of the controlled company does not come to any heir, therefore, no heir is called upon to pay the amount of estate duty attributable to the inclusion of that slice in the chargeable estate. By section 19, the controlled company itself is liable to pay the corresponding amount of estate duty. In the present case, however, learned counsel urges, no slice of the assets of Amalgamations has been included in the estate of the deceased by the assessing authority as property deemed to pass on the death of the deceased and, therefore, the demand issued to the controlled company constitutes a mistake apparent from the record. The application of rule 15 is also contested and this, according to learned counsel, is a clear mistake committed by the Controller. It is urged that there is a mistake apparent from the record in the directions requiring Amalgamations to pay the entire amount of estate duty. It seems to us that all the heirs other than Sivasailam had agreed that, as accountable persons, they would abide by the accounts r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets of the deceased under its control any dutiable property. He has emphasised that if the assessment has created a charge upon the assets of the company as a whole, the assessment would be under section 17 of the Act. The company in such a situation would be liable and the assessment would be a charge upon its assets. Rule 15 of the Controlled Companies Rules, on the other hand, is concerned with an incidental aspect of valuation and the assets of the controlled company come in as a standard of reference. The assessment itself in such a case is not on the company or on its assets. The subject-matter of the assessment is the share which a shareholder of the controlled companies dies possessed of. The company is not liable for the duty based on the share valuation. The company's assets are by no means charged for the payment of that duty. In this context, thus, according to learned counsel for the Revenue, the estate duty paid by the assessee-company on the assets of the deceased, Anantharamakrishnan, being not a charge upon the assets of the company, it was not an essential expenditure for its business and, in any case, it can recover the duty paid by it from the heirs and leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of this sub-section the expressions ' distributed assets ' and ' assets of the company passing on the death ' do not include any distributed assets of the company which the deceased received on their distribution ; and a person who, having received any distributed assets of the company, has died before the deceased shall be deemed to have been a person accountable by virtue of clause (c). (2) Where a company incorporated outside India is accountable for any duty by virtue of the preceding sub-section or of this sub-section, every person who is a member of that company at the death shall also be accountable for a rateable part of that duty in proportion to the value of his interest in that company. (3) A person accountable for any duty by virtue of this section shall, for the purpose of raising and paying the duty, have all the powers conferred on accountable parties. (4) On a winding up of the company, sub-section (1) of section 530 of the Companies Act, 1956 (1 of 1956), shall have effect as if there were included in clause (a) of that sub-section a reference to any duty payable in respect of assets of the company passing on a death by virtue of section. 17 of this Act, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of death shall be deemed to pass on the donor's death. " that is, the same as in section 191 of the Indian Succession Act. There are specific provisions under the Act as respects such properties in which the deceased or any other person had an interest only as a holder of an office or representative of the benefits of the charge or as respects gifts within a certain period or as respects properties in which the deceased had unlimited interests and in respect of such situations where the donor remained in possession and possession did not immediately pass to the donee after the gift, etc. But, as respects property transferred to a controlled company, the only reference is under section 17(1) of the Act in these words : " 17. Property transferred to a controlled company.--- (1) Wherethe deceased has made to a controlled company a transfer of any property (other than an interest limited to cease on his death or property which he transferred in a fiduciary capacity), and any benefits accruing to the deceased from the company accrued to him in the three years ending with his death, the assets of the company shall be deemed for the purposes of estate duty to be included in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a subsidiary company or a company in which public are substantially interested or when a company shall be deemed to be under the control of not more than five persons as before us there is no dispute in this behalf and it is the acknowledged case of all parties that the assessee-company is a controlled company. It is necessary, however, to take notice of sub-section (5) of section 17 which states, " for the purposes of section 34, the deceased shall be deemed to have had an interest in the property deemed by virtue of this section to be included in the property passing on his death ". Section 34 speaks of the aggregation of property and rates of duty. By virtue of sub-section (5) of section 17, any property transferred by the deceased to a controlled company is included in the group of such properties which are aggregated under section 34 for determining the rate of estate duty. Section 19 of the Act, which has already been quoted by us in full, and which section brings in the group of the accountable person, a controlled company, makes a specific reference to section 53 of the Act, under sub section (8) thereof and excludes the application of sub-sections (1) and (3) thereof i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows : " Where two or more persons are accountable, whether in the same capacity or in different capacities, for estate duty in respect of any property passing on the death of the deceased, they shall be liable jointly and severally for the whole of the estate duty on the property so passing. " There is nothing to read in sub-section (5) of section 53 to confine it to the person accountable under sub-section (1) of section 53 only. It has the effect of acknowledging the liability of a controlled company also as a person accountable. The scheme of the Act under Part VII, which deals with such provisions as to collection of duty and includes section 53 aforementioned, contains some specific provisions which show that in certain cases, trustees may be included in the category of persons accountable and section 55 speaks specifically about every company, to which a transfer of property has been made by the deceased as mentioned in section 17 in these words : " 55. Every person believed to be in possession to deliver statement of particulars of property as required by the Controller.--- Every person accountable for estate duty, every company to which, in the opinion of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of which such a disposition formed one." Rule 5 speaks of benefits accruing to the deceased from company in these terms : " 5. Benefits accruing to deceased from company.--- (1) The following shall be treated as benefits accruing to the deceased from the company, that is to say : (a) any income of the company, and any periodical payment out of the resources or at the expense of the company, which the deceased received for his own benefit whether directly or indirectly, and any enjoyment in specie of land or other property of the company or of a right thereover which the deceased had for his own benefit whether directly or indirectly ; (b) any such income or payment or enjoyment which the deceased was entitled to receive or have as aforesaid ; and (c) any such income or payment or enjoyment which the deceased could have become entitled to receive or have as aforesaid by an exercise in the three years ending with his death of any power exercisable by him or with his consent; and where the deceased could, by an exercise in the said three years of any such power as aforesaid, have become entitled to receive as aforesaid any payment out of the resources or at the expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money or money's worth received by the company for its own use and benefit, a further allowance shall be made, in addition to the allowances specified in subrule (1), of an amount equal to the value of the consideration given. (4) For the purpose of the estimation of the principal value of any distributed assets, section 36 of the Act shall have effect with the substitution for the reference therein to the time of the death of the deceased of a reference to the time of the distribution, and effect shall be given to the proviso to the said section 36 (which relates to depreciation by reason of the death of the deceased) as at the time of the distribution only, due regard being had to the expectation of life of the deceased at that time. " Rule 11 speaks of limitation on, and prevention of duplication of, charge, rule 12 adjustments as to distributed assets, rule 13 adjustments as to additions to assets and rule 14 about accounting year. Rule 15 says about valuation for estate duty of shares and debentures of certain companies. It is this rule which has fallen for consideration in Kalyani Sundaram's case [1980] 126 ITR 615 (Mad) and which has given rise to the present proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be recovered from any person on the ground only that he is entitled to any interest in or to any sum charged on the assets which the company had at the death of the deceased. A controlled company's position as a person accountable is realised only under section 17(4)(i), read with section 19(1) of the Act and in a situation where the deceased had made to it a transfer of any property other than an interest limited to three years on his death or property which he transferred in a fiduciary capacity. It is not disputed before us that (1) the deceased, viz., Anantharamakrishnan, had transferred his shares in some other companies as well as some other properties to the assessee-company, (ii) the assessee-company is a controlled company as defined under section 17(4)(i) of the Act, and (iii) it is a person accountable. We have difficulty in accepting the contention of the Revenue that a controlled company can be a person accountable otherwise than under section 19(1) of the Act. We have taken notice of the definition of " person accountable " under section 2(12A) of the Act which says, " person accountable " or " accountable person " means the person accountable for estate duty with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and levy of tax. The view that we have taken is supported by the observations in a judgment of the Gujarat High Court in the case of CIT v. Mrs. Indumati Ratanlal [1968] 70 ITR 353, to which we shall refer later in some detail. The Revenue's argument in the said case was that the liability for payment of estate duty was a personal liability of the assessee. The Gujarat High Court has observed on this as follows (at page 356) : " The argument of the Revenue was that the liability for payment of estate duty was a personal liability of the assessee and the moneys were borrowed by her to discharge such personal liability and there was accordingly no connection, direct or indirect, between the borrowing of the moneys and the earning of income from shares received by her under the will of her husband. The purpose of borrowing moneys and payment of interest thereon was, it was contended on behalf of the Revenue, to discharge the personal liability of the assessee for payment of estate duty and this purpose had no connection whatever with the income earned by the assessee on the shares. The analogy of moneys borrowed for payment of income-tax was invoked on behalf of the Revenue and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate duty is levied upon the principal value of the property passing on the death of the deceased, it has to be paid by somebody : some person has to be made liable for payment of it and that is done by section 53, sub-section (1). Section 53, sub-section (1), lays down who shall be liable for payment of estate duty to the State and according to that sub-section, where any property passes on the death of the deceased, (a) every legal representative to whom such property so passes for any beneficial interest in possession or in whom any interest in the property so passing is at any time vested, (b) every trustee, guardian, committee or other person in whom any interest in the property so passing or the management thereof is at any time vested, and (c) every person in whom any interest in the property so passing is vested in possession by alienation or other derivative title, shall be accountable for the whole of the estate duty on the property passing on the death. Section 53, sub-section (5), provides that where two or more persons are accountable for estate duty in respect of any property passing on the death of the deceased, their liability shall be joint and several. But there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed husband on the date when she paid the estate duty on behalf of herself and her minor sons with moneys already borrowed from the bank. The Gujarat High Court held that the liability of an accountable person for payment of estate duty is, as pointed out above, a personal liability and is not different in quality or character from that of an assessee liable to pay income-tax. Learned counsel for the Revenue has drawn our attention to a judgment of the Supreme Court in CIT v. Malayalam Plantations Ltd. [1964] 53 ITR 140. The material facts, in the said case, were as follows : " The assessee was a resident-company incorporated outside India. Most of its shareholders were in the United Kingdom. During the accounting period the company paid estate duty which was payable on the death of certain shareholders who were not domiciled in India. The assessee debited the said amounts to revenue in its accounts in ascertaining the profits and gains for the said year. In another year also, on the death of certain shareholders it paid estate duty and debited the same to revenue. The Income-tax Officer included the said amounts so paid towards estate duty in the profits and gains of the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by means of a mortgage to him, has any application, for it cannot be said that the company has any legal interest in the shares owned by the third party. That apart, the said sub-section also cannot have extra-territorial operation. " The Supreme Court noted that nothing had been placed before it to enable it to come to the conclusion whether in England, where the concerned shareholders died, the resident company could recover the amount representing the estate duty paid by it in India from the legal representatives of the deceased shareholders. The Supreme Court in the said case thus proceeded on the assumption that the assessee who, as a statutory agent, paid to the State the estate duty could not recover the same from the legal representatives of the deceased non-resident shareholders and in that situation the company would be out of pocket to the extent it paid the estate duty of the said persons. The court held on that basis that the assessee-company's paying the duty was expenditure incurred by it. The Supreme Court posed then whether the crucial words of section 10(2)(xv) of the 1922 Income-tax Act, " for the purpose of such business " after the 1939 amendment were at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be difficult to allow deduction of wealth-tax in respect of individuals who have both business assets and debts and non-business assets and debts and observed : " . . . . the wealth-tax return form itself requires the assessee to show what are the business assets and liabilities and what are non-business assets and liabilities. " and added : " At any rate, it should not be difficult to evolve a principle or frame statutory rules to find out the proportion of the tax which is really incidental to the carrying on of the trade. On the facts of this case it is clear that payment of wealth-tax was really incidental to the carrying on of the assessee-company's trade. " The observation in the separate judgment of Beg J., in this case is quite instructive. It is as follows : " To lay down, as we are doing in this case, that it is the causal connection between payment of tax and that part of net wealth which is used wholly and exclusively for trade and not the mere character or capacity for the possession of which the tax is demanded, which determines whether it is an allowable deduction or not, under section 10(2)(xv) of the Act, seems to me to amount to nothing more t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o utilise the whole assets. On the question, however, of the amount borrowed by the assessee- company to pay the estate duty, we have good reasons to accept the case of the assessee-company, although it may also be said that the Revenue authorities have not made any serious enquiry whether in fact such a borrowing existed in the sense that it was a genuine borrowing, or not a genuine operation, but only a book transaction of a sort to show that for the payment of estate duty certain loan was incurred by the assesseecompany. In Mrs. Indumati Ratanlal's case [1968] 70 ITR 353, the Gujarat High Court considered whether money borrowed for payment of estate duty was deductible under section 57(iii) of the Income-tax Act, 1961, and held as follows : " We must, therefore, reach the conclusion that if moneys were borrowed by the assessee for the purpose of discharging what was purely a personal liability as an accountable person to pay estate duty, interest paid on the borrowed moneys would not be an allowable expenditure under section 57(iii). The question then arises : Does it make any difference if there was a charge on the shares for payment of estate duty and moneys were borrowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure under section 57(iii) of the Income-tax Act when the shares had not yielded any dividend in the shape of return during the relevant assessment year. The Revenue argued before the Supreme Court that the language of section 37(1) when contrasted with the phraseology employed in section 57(iii) of the Income-tax Act pointed out that the Legislature had deliberately used words of narrower import in granting the deduction under section 57(iii). Section 37(1) provided for deduction of expenditure laid out or expended wholly and exclusively for the purpose of the business or profession in computing the income chargeable under the head " Profits or gains of business or profession ". The language used in section 37(1) was " laid out or expended for the purpose of the business or profession " and not " laid out or expended for the purpose of making or earning such income " as set out in section 57(iii). The words in section 57(iii) being narrower, contended the Revenue, they cannot be given the same wide meaning as the words in section 37(1) and, hence, no deduction of expenditure could be claimed under section 57(iii) unless it was productive of income in the assessment year in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of subscribing signature thereto, except making corrections of apparent mistakes of clerical nature. It is not as if instances are not wanting in a situation like the present one on hand. In similar situations, on earlier occasions, the order like the present one had been appended with certificate by the personal assistant to the judges and the court officer concerned and such certificates had been duly countersigned by the Registrar of this court. " The said view is supported by the judgment of the Supreme Court in the case of Vinod, Kumar Singh v. Banaras Hindu University, AIR 1988 SC 371, in which it is observed that in the absence of exceptional circumstances, a judgment delivered orally in open court must be taken to be final. The Supreme Court quoted an earlier judgment in the case of Surendra Singh v. State of Uttar Pradesh, AIR 1954 SC 194, in which case a Division Bench of the Allahabad High Court sitting at Lucknow consisting of Kidwai and Bhargava JJ., heard a criminal appeal and on December 11, 1952, reserved judgment. Before it could be delivered Bhargava J., was shifted to Allahabad. While there, he dictated a judgment treating it to be a judgment of both. He s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... themselves and reach a tentative conclusion. That is not their judgment. They may write and exchange drafts. Those are not the judgments either, however heavily and often they may have been signed. The final operative act is that which is formally declared in open court with the intention of making it the operative decision of the court. That is what constitutes the ' judgment '.... As soon as the judgment is delivered, that becomes the operative pronouncement of the court. The law then provides for the manner in which it is to be authenticated and made certain. The rules regarding this differ but they do not form the essence of the matter and if there is irregularity in carrying them out it is curable. Thus, if a judgment happens not to be signed and is inadvertently acted on and executed, the proceedings consequent on it would be valid because the judgment, if it can be shown to have been validly delivered, would stand good despite defects in the mode of its subsequent authentication. After the judgment has been delivered, provision is made for review. One provision is that it can be freely altered or amended or even changed completely without further formality, except notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel appearing for both parties have accepted that the judgment was pronounced in the open court by Gulab C. Gupta J. The transcription of the said judgment is on the record. We have no hesitation in ordering for the reasons of the principles aforementioned, that the same be authenticated by the Registrar of the court and delivered to the parties accordingly, if they apply for a copy thereof, in accordance with law. The questions aforementioned are answered as above. No costs. In the instant case, learned counsel for the Revenue as well as learned counsel for the assessee have given creditable assistance to the court. The records of the case reveal that it was the third exercise of the parties, that is, the Revenue and the assessee, in the hearing of the case, in the sense that we are the third Bench hearing the case. For a full and satisfactory understanding of the questions involved in the case, a long, lingering and detailed hearing was necessary and in that, learned counsel appearing for the parties have fully co-operated with the court. It will be unfair if we do not record and state that the Revenue should acknowledge the fact that its learned standing counsel has worked ..... X X X X Extracts X X X X X X X X Extracts X X X X
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