TaxTMI 
TaxTMI 
2006 (3) TMI 188
X X X X Extracts X X X X
X X X X Extracts X X X X
....rted into one equity share of the face value of Rs. 10 each at a premium of Rs. 30 per share on the expiry of 15 months from the date of allotment of the debenture. Part-B debenture was to carry an interest at the rate of Rs. 14 per annum till the date of conversion payable half yearly on 30th June and 31st December each year and on conversion. As per clause 6 of the prospectus, the debentures till the period of conversion were transferable and transmittable in the same manner and to the same extent and subject to the same restrictions and limitations as were applicable to the existing equity shares of the company. The provisions relating to transfer and transmission in respect of the equity share as provided in the Articles of Association of the company are made to apply mutatis mutandis to the debentures as well. It further provides that the debenture-holders would not be entitled to any rights and privileges available to the shareholders of the company and the debentures were not conferred upon the holders thereof a right to receive notice or to attend and vote at any general meetings of the company or to receive annual reports of the company. The objects of the issue are stated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equity shares on allotment or after certain period and this money received by the assessee in the form of application money was never to be repaid to the subscribers thereof. This money, in fact, permanently becomes part of the funds of the company in the form of equity and thus, the assessee company gained an advantage of enduring nature. He further observed that the Supreme Court decision relates to a period when instruments like convertible debentures were not in vogue which is a recent phenomena and, therefore, the decision or the ratio as obiter dictum given by the Supreme Court were in respect of such debentures which were not to be converted into equity share and which were to be redeemed to the debenture holders on or after a specified period. According to him, convertible debentures cannot be equated with loans as they are not to be repaid to the subscribers and it becomes part of its funds on permanent basis. 5. The CIT(A) upheld the disallowance by observing in paragraph 2.2 as under:- "2.2 The appellant has relied on the decision of the Supreme Court in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52 in support of its contention that the expenditure i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ier Automobiles Ltd. v. CIT [1971] 80 ITR 415, Supreme Court decision in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52, decision of Jaipur Bench of the Tribunal in the case of Dy. CIT v. Modern Syntex (India) Ltd. [2005] 95 TTJ (Jp.) 161 and Bombay ITAT decision in the case of J.M. Shares & Stock Brokers Ltd. v. Dy. CIT [2004] 83 TTJ (Mum.) 1052, in the case of Dy. CIT v. A.T.V. Projects India Ltd. [2003] 84 ITD 470 and in the case of Tata Chemicals Ltd. v. Dy. CIT [2000] 72 ITD 1. 7. Shri Jagdeo, the ld. CIT-DR and Dr. Banwari Lal, DR, appearing for the revenue on the other hand, submitted that the funds were raised through convertible debentures with a view to raise capital and, therefore, the expenditure for that it would be capital expenditure in view of the two Supreme Court decisions in the case of Brooke Bond (India) Ltd. v. CIT [1997] 225 ITR 798 and in the case of Punjab State Industrial Development Corpn. Ltd. v CIT [1997] 225 ITR 792 Referring to the decision of the Supreme-Court in the case of India Cements Ltd. he submitted that it was a case of loan that was held to be not an asset and it was to secure finance for a certain period. A loan has to be repaid ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was not allowed as a deduction. Referring to the decision in the case of Network Ltd. v. Dy. CIT [2003] 84 ITD 67 (Delhi) (TM), he submitted that it was a case of surrender of debenture and allotment of shares wherein the decision of Calcutta High Court in the case of East India Hotels Ltd. was considered and upheld the disallowance for convertible portion of debentures. Referring to the prospectus he submitted that major part of the debenture amount was adjusted as part of the premium for allotment of the shares also shows that it was issue of capital. He then referred to the provisions of section 37(1) wherein the expenditure to be allowed is to be wholly and exclusively for the purpose of carrying on the business of the assessee and if there is a mixed purpose, then the expenditure would not be allowable. The fact that conversion is repayment is not considered in East India Hotels Ltd.'s case decision cannot be and is not a ground for distinction. 8. Shri Soparkar, the ld. counsel of the assessee, in reply, submitted that the repayment was by conversion and reference was invited to the decision of Supreme Court in the case of J.B. Boda & Co. (P.) Ltd v. CBDT [1997] 223 I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n was whether the amount paid to the Registrar of Companies as filing fee for enhancement of capital was revenue or capital expenditure. After taking into consideration the decision in the case of India Cements Ltd. and Empire Jute Co. Ltd. v. CIT [1980] 124 ITR, the Supreme Court held that the fee paid to the Registrar of Companies as filing fee for enhancement of capital was not a revenue expenditure by observing as under:- "We do not consider it necessary to examine all the decision in extenso because we are of the opinion that the fee paid to the Registrar for expansion of capital base of the company was directly related to the capital expenditure incurred by the company and although incidentally that would certainly help in the business of the company and may also help in profit-making, it still retains the character of a capital expenditure since the expenditure was directly related to the expansion of the capital base of the company. We are, therefore, of the opinion that the view taken by the different High Courts in favour of the revenue in this behalf is the preferable view as compared to the view based on the decision of the Madras High Court in Kisenchand Chell....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt reversed the order of the Tribunal and it observed that there can be no doubt that at least to the extent of Rs. 25 lakhs that amount was expended for purposes of a capital nature and there was no material for the utilization of the other sum of Rs. 15 lakhs. The Supreme Court referred to in this connection the decision of Bombay High Court in the case of S.F. Engineer v. CIT [1965] 57 ITR 455 wherein the Bombay High Court held that the expenditure incurred for raising loan for the carrying on of a business cannot in all cases be regarded as an expenditure of a capital nature. On the facts of the case, they held that as construction and sale of the building was the sole business of the firm and the building was its stock-in-trade, and the loan was raised and used wholly for the purpose of acquiring this stock-in-trade and not for obtaining any fixed assets or raising any initial capital or for expansion of the assessee's business, the expenditure incurred for the raising of loan was not an expenditure of capital nature but revenue expenditure. Although the conclusion of the High Court was held to be correct, the Supreme Court expressed a decent with the principle that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....spect of expenditure on account of stamp duty even after introduction of section 35D. Under the circumstances, the Tribunal was right in allowing the same. 16. In the case of Premier Automobiles Ltd. before the Bombay High Court, the amount spent for stamp duty, registration fees, lawyer's fees, etc. in respect of the issue of debentures to secure a loan was claimed as a business expenditure and was held to be an amount spent not in the nature of capital expenditure and was laid out and expended wholly and exclusively for the purpose of assessee's business and was, therefore, allowable as a deduction under section 10(2)(xv) of the Act. The court observed that the act of borrowing money was incidental to the carrying on of business, the loan obtained was not an asset or an advantage of enduring nature, the expenditure was made for securing the use of money for a certain period and it was irrelevant to consider the object with which the loan was obtained. 17. The decision of the Supreme Court in India Cements Ltd.'s case and the aforesaid two decisions of Bombay High Court are in connection with the expenditure on the raising a simple loan or by issue of debentures ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ties other than the State Government and Central Government. As per section 28 of the Corporations Act, where the capital of a Corporation is provided by the Central Government or State Government, the Corporation was to pay interest on such capital at such rate as may, from time to time, be fixed by the State Government in consultation with the Central Government and such interest shall be deemed to be part of the expenditure of the Corporation. In view of this provision, the capital was provided by the Union of India through the Northern Railway and Punjab Government and the assessee paid interest to both of them and claimed the same as deduction. The question was whether the interest paid was an allowable deduction. The court held that there is no provision in the Act which contemplates the repayment of the capital so provided under section 23 of the Act and apart from that, section 23 provided that the Central Government and the State Government may provide any capital. In other words, it was not by virtue of any agreement, etc. between the parties, but because of the statutory provision that the Governments are obliged to provide the capital and that by making provision, the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eating a charge on the whole or a part of the company's stock and property though not necessarily in the form of a mortgage. Section 137 of the Transfer of Property Act was also noted wherein a debenture is regarded as a subject-matter of transfer and not as constituting a transfer by itself. A debenture, it was observed, means a document which either creates a debt or acknowledges it, and any document which fulfils either of these conditions is a debenture. Although the instruments called debentures may be described with comparative ease, a judicial definition of a debenture - or at any rate an accurate one has not been obtained and is perhaps not urgently required. The meaning of debenture in the Accountancy Text Book by William Pickles was also noted to mean as a document acknowledging a loan to a company and is generally executed under the seal of the company usually (but not necessarily) containing provisions as to payment of interest and the repayment of the principal and giving a charge on the assets of such company, and may give security for the payment over some or all of the debts and g undertakings of the company. Halsbury's Law of England, 4th Edition, 7th Volum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....debenture by the court. This according to the ld. Counsel of the assessee is a proposition that act of conversion of debenture into equity share is an act of repayment of debenture by such conversion. On a close scrutiny of the case we, however, find that it was not a finding of the court but an admission of the situation as even according to the Commissioner of Income-tax 20 per cent loan was payable by issue of shares and this along with repayment of loan within 11 years, was amounting to taking the loan not for a certain and limited period, therefore, the decision of the Supreme Court in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52 was held not applicable. In appeal before the Tribunal, the Tribunal has taken the view that even after insertion of section 35D in the Act of 1961, the expenses on the issue of debentures cannot be disallowed as the decision of the Supreme Court in the case of India Cements Ltd. still holds the field and, therefore, the expenditure on the issue of debentures for short-term loan can be allowed as revenue expenses. The court, therefore, held that "Admittedly, here the loan has to be repaid within eleven years from the date of allotment of deb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A was to be compulsorily and automatically converted into shares of Rs. 10 each at a premium of Rs.20 each after six months and part-B was also to be converted into 2 shares of Rs.10 each at a premium of Rs. 20 each after 18 months. The expenditure incurred on the issue of debentures compulsorily convertible into shares was allowed as a deduction. 22. In the case of Banco Products (India) Ltd. before the Ahmedabad Bench of the Tribunal, the assessee company issued 3 lakhs equity shares of Rs. 10 each and 1 lakh 15 per cent partly convertible debentures of Rs.100 each to the public with the object specified in the prospectus - (i) to finance the capital expenditure of the company; (ii) to supplement the company's long-term resources for working capital; and (iii) to obtain listing of the equity shares and debentures of the company on the stock exchange. A sum of Rs. 8 lakhs was incurred on these public issues and was claimed as a deduction on the basis of the ratio of the amount of shares and debentures i.e. 77 per cent for debentures. The Assessing Officer disallowed the debentures issue expenses claimed by the assessee on the ground that the expenditure was incurred to incr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtly convertible debentures. It, therefore, held that the proportionate expenditure on the convertible part of the debentures is for the augmentation of equity base of the company and as such has to be treated as capital expenditure. It, therefore, upheld the order of the CIT(A). 24. Nature of debentures is an acknowledgement of liability to repay in cash or through bank or in any other manner as agreed to by the holder. Option was there with the holder of the debenture to get it converted or retain or get repaid as noted in decision of Lakshmi Vilas Bank Ltd.'s case and United Western Bank Ltd.'s case. Nature of convertible debentures could be only an advance or deposit akin to or like share of application money as there is no repayment of money but the amount received is adjusted towards shares compulsorily and interest is paid on that, also until shares are allotted and the amount is adjusted. No option is for the holder as debentures are compulsorily converted into shares. No action on the part of holder of debenture to get it converted as it is converted automatically on a specified date. Section 81 of the Companies Act deals with both in the like manner. Even the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nal had allowed the expenditure except the solitary decision in the case of Banco Products (India) Ltd. where the decision of the Calcutta High Court in the case of East India Hotels Ltd. was not available to the Ahmedabad Bench that decided the case. (b) In the case of J.M. Shares & Stock Brokers Ltd. before the Bombay Bench of the Tribunal, the asses see issued certain convertible debentures during the year at the face value of Rs. 50 which was to be converted into five shares of Rs.10 each and as a matter of fact, these debentures got converted into equity shares, during the year itself. The Assessing Officer treated the expenditure on the issue of convertible debentures as expenditure incurred on the issue of shares. The CIT(A) upheld the disallowance. When the matter came up before the Tribunal, the matter was decided in favour of the assessee by observing as under:- "Now, limited question before us to adjudicate upon, is whether the conversion of PCD into shares in the same year or after the end of the relevant year has got any bearing on the allowability of the expenses incurred on the issue of convertible portion of the debentures. The addition by the Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee and would, therefore, be an allowable deduction. 26. We also find that in the following cases the claim was allowed proportionately to the time the debenture was not converted in the share. In the case of Essar Steel Ltd. v. Dy. CIT [2005] 97 ITD 125 (Ahd.) (TM), the assessee issued fully convertible debentures in the year 1989 which were converted into shares partly on allotment in 1990 and fully by 1992. The assessee incurred a sum of Rs. 6,51,95,614 for the issue of debentures and claimed the same to be revenue, even though this amount was capitalized by the assessee being expenditure incurred in connection with rights issue of debentures during the relevant accounting year. The Assessing Officer noted the object of issue to be - (i) to part-finance the steel project and related investments; (ii) to meet the expenditure of the issue, (iii) to repay the bridge loan, if any, taken against the loan issue; and (iv) to meet the normal capital expenditure of working capital needs. He observed that the entire issue went to increase the paid up capital and share premium account because the entire debenture was fully convertible into shares within a period of 15 months. He....
X X X X Extracts X X X X
X X X X Extracts X X X X
....because at the time when the expenditure was incurred, it was for right issue of debentures and not capital. We direct accordingly." 27. We further find contrary decisions on this issue. In the cases the Tribunal had upheld the disallowance of expenses for issue of the debentures, which were to be converted into shares. (i) In the case of A.T.V. Projects India Ltd., a case before the Bombay Tribunal, 9/10th of the expenditure amounting to Rs. 53.29 lakhs was claimed as a revenue expenditure for raising loan through convertible A debentures issued by treating the same expenditure as preliminary expenses and restricted the deduction to 1/10th thereof under section 35D. Referring to the Circular of the Board and the decision of the Supreme Court in the case of India Cements Ltd., the Tribunal held that if the company incurs expenditure on issue of debentures, when it is already in business, it is not covered either under section 35D(1)(i) or (ii) of the Income-tax Act because what is contemplated under section 35D is an expenditure incurred before commencement of the business or after the commencement of business but in connection with the expansion of the undertaking or i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to rank pari passu in all respects with the existing equity shares. The Tribunal observed that the same result could have been achieved by the assessee by public issue of shares and debentures separately. It was only because of convenience and from economic point of view that a combined public issue was made. In that context, it was observed by the Tribunal that it is settled legal position that nomenclature of a document is not relevant. What is relevant is the true nature of the transaction. It was apparent from the scheme that the assessee had incurred expenditure for raising capital of the company as well as loans. The Part A of debentures was to become permanent part of the capital structure of the company within a short period of 6 months from the date of allotment. It was only Part-B which was to be returned on redemption. Merely because single issue was made for shares and debentures in the guise of debenture, the entire expenditure did not partake the character of revenue expenditure. The Tribunal held that the proportionate expenditure should be allowed as revenue expenditure. (iii) In the case of Ranbaxy Laboratories Ltd., a case before the Delhi Bench of the Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the basis of the ratio of the amount of shares and debentures i.e. 77 per cent for debentures. The Assessing Officer disallowed the debentures issue expenses claimed by the assessee on the ground that the expenditure was incurred to increase the share capital of the company and hence the same was not allowable as deduction. The CIT(A) held that the expenditure incurred on convertible portion of Rs. 30 each was in the nature of capital expenditure because 30 per cent of the debenture issue would go to augment the share capital of the company and the balance 70 per cent could be treated as loan. The assessee was in appeal. The Tribunal upon discussing the basic requirement of a debt vis-a-vis the convertible debentures being the repayability; that broadly stated, a debt being a liquidated money obligation for the recovery on which an action would lie; that it being an ascertained liquidated quantified obligation enforceable in praesenti or in future). A debt must be a debitum that is due; that Debitum in praesenti solvendum in futuro is vital conception of a debt and, therefore, viewed from this angle, convertible portion of the debenture could not be termed as a debt because the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tended by the g learned Departmental Representative, there is no dispute between the learned Members of the Division Bench that the expenditure pertaining to issue of share capital is not to be allowed on Revenue account. The parties before me have very aptly and have in fact clearly understood the impact of the judgment of the Hon'ble Supreme Court in the case of India Cements Ltd., but at the outset, I must observe that the reliance by the learned Judicial Member on the judgment of the Hon'ble Supreme Court in the case of Rajasthan State Warehousing Corporation is not at all appropriate since it does not deal with the point at issue as it is on the question of apportionment of expenditure between taxable items and non-taxable items of income. As against this, the judgment of the Hon'ble Supreme Court in the case of Punjab State Industrial Development Corpn. Ltd is direct taking the view that expenditure on issue of share capital is to be treated as capital expenditure. This has been relied upon by the learned Departmental Representative and very aptly. The judgment of the Hob'ble Calcutta High Court in the case of East India Hotels Ltd. relied upon by the learned ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enue expenditure by treating the same as pertaining to borrowing of funds. It was submitted before the Assessing Officer that in respect of each debenture of the face value of Rs. 100, Rs. 30 was convertible into three shares of Rs. 10 each on 30th June, 1987 and the balance of Rs. 70 was non-convertible and was redeemable in the 6th, 7th and 8th years of issue. The Assessing Officer disallowed the claim treating the same to be towards increase of share capital. On appeal, the Commissioner of Income-tax (Appeals) held that the expenditure incurred on the convertible portion i.e. 30 per cent was in the nature of capital expenditure as it would go to augment the share capital of the company and the balance was to be treated as loan. On further appeal the Tribunal confirmed the view taken by the CIT (Appeals) noting that the convertible part of the debenture was clearly identifiable and the conversion was mandatory and, therefore, it could not be said that the convertible part had the characteristics of loan funds. The Tribunal further observed that the date and manner of conversion was certain and nothing was left to chance. It is observed that in taking the aforesaid view the Tribun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers. The assessee firm stated that it had no obligation to make any advances nor had it any assets on the security of which it could raise the money. The company, therefore, decided to terminate the managing agency and in turn agreed with the newly formed company for taking over the managing agency of the firm. It received a sum of Rs. 2 lakhs on the termination of the agreement. The Tribunal held that the termination of the managing agency was a collusive device practiced for the purpose of evading income-tax, that the partners of the firm continued to enjoy the benefit of the managing agency as shareholders and directors of the new managing agency company, that there was only a change in the personnel in the managing agency and not a change in office, and that the sum of Rs. 2 lakhs was received by the assessee by virtue of its office and that it was a receipt in the course of its managing agency business. The matter reached the Supreme Court and the Supreme Court held as under:- "Held, (i) that in cases such as this the income-tax authorities were entitled to pierce the veil of corporate personality and look at the reality of the transaction. It was true that from the j....
X X X X Extracts X X X X
X X X X Extracts X X X X
....set to the partnership firm represents a real attempt to contribute to the share capital of the partnership firm for the purpose of carrying on the partnership business or is nothing but a device or ruse to convert the personal asset into money substantially for the benefit of the assessee while evading tax on a capital gain. The Income-tax Officer will be entitled to consider all the relevant indicia in this regard, viz., whether the partnership is formed between the assessee and his wife and children or substantially limited to them, whether the personal asset is sold by the partnership firm soon after it is transferred by the assessee to it, whether the partnership firm has no substantial, or real business or the record shows that there was no real need for the partnership firm for such capital contribution from the assessee. All these and other pertinent considerations may be taken into regard when the Income-tax Officer enters upon a scrutiny of the transaction, for in the task of determining whether a transaction is a sham or an illusory transaction or a device or ruse, he is entitled to penetrate the veil covering it and ascertain the truth." 30. In case of B.M. Kharwar b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the written down value is liable to be brought to tax." 31. The decisions of the Tribunal in the cases of sona Steering Systems Ltd. v. Dy. CIT [2003] 129 Taxman 152 (Delhi) (Mag.); CIT v. Ranbaxy Laboratories Ltd. [2004] 88 ITD 283 (Delhi); Banco Products (India) Ltd. v Dy. CIT [1997] 63 ITD 370 (Ahd.) have also been decided by looking into the substance of the matter and held that the expenditure as was relatable to non-convertible debentures alone was allowable as a deduction. Accounting Standard AS-20 issued by the Institute of Chartered Accountants of India have also understood the convertible debenture as an equity share while determining the earnings per share where the basic earnings per share is required to be calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighed average number of equity shares outstanding during the period. In that connection, a potential equity share is required to be taken into consideration which is defined to mean "a financial instrument or other contract that entitles, or may entitle, its holder to equity shares". In clause 7, one of the examples of potential equity shares is stated to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....morandum and Articles of Association of the company; (ii) on printing of the Memorandum and Articles of Association; (iii) by way of fees for registering the company under the provisions of the Companies Act, 1956 (1 of 1956); (iv) in connection with the issue, for public subscription, of shares in or debentures of the company, being underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus; (d) such other items of expenditure (not being expenditure eligible for any allowance or deduction under any other provision of this Act) as may be prescribed." 33. This section basically applies to the expenditure incurred before commencement of business. It also applies to the expenditure incurred after commencement if there was expansion of industrial undertaking or setting up of a new industrial unit. The object of the issue of debentures is stated to be three-one of which is financing the new 100 per cent EOU project of gray cotton fabrics at Karnanagar, Mehsana District in Gujarat; the other being to have the equity shares enlisted in the stock exchange which was possible when there is a large e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve benefit to the assesses in cases of capital expenses and that the Board had clarified that the provision for amortization is not intended to supersede any other provision of the Income-tax Law under which such expenditure is admissible as a deduction or deduction allowable by virtue of the decision of the Supreme Court in India Cements Ltd's case. In the another decision in the case of Mahindra Ugine & Steel Co. Ltd., the Bombay High Court dealt with the issue of stamp duty on debenture issues and held that it was an allowable deduction de hors provisions of section 35D of the Act. It was contended on behalf of the Department that payment of stamp duty on debenture was not an allowable deduction but the Tribunal rejected the contention and the High Court agreed with the Tribunal by stating "the expression in connection with the issue of public subscription of the debentures of the company essentially for the expansion of the business is a very wide expression and it would certainly include the stamp duty payable by the assessee on the debenture issue". Section 35D would apply only in respect of expenditure which is otherwise not allowable under the law, for example, capital ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....connection with setting up a new unit. On the other hand, the assessee has specifically made a claim for amortization and, therefore, such expenditure will not qualify for deduction under any other provision of the Income-tax Act. Referring to the observation of the High Court "but how a deduction which is allowable otherwise as revenue expenses can be denied after the insertion of section 35D, the learned counsel failed to explain", the Tribunal observed that the Circular has nowhere stated that expenditure allowable under section 35D should be considered under section 37(1) of the Act. On the other hand, it merely clarifies that an expenditure which is otherwise allowable under section 37(1) should not be disallowed merely because it does not fall under section 35D of the Act. The Tribunal therefore, held that the assessee was entitled to 1/10th of the expenditure under section 35D and thus restored the order of the Assessing Officer. We, however, need not express any opinion on the applicability of section 35D as that is not an issue directly before us and only an indirect reference has been made. 35. Maganlal Mohanlal Panchal (HUF)'s case Gujarat High Court decision, sta....