1. PREAMBLE

This is in continuation of, to serve the purpose of a supplement to, the discussion in the previous posted Article @  Reduction of Equity Share Capital – Tax Implication

The two ITAT cases stand out, as  a sore thumb. in that, reminds self, of similar instances often come across, sadly for more than one reason. One such reason is the inadequacy or insufficiency of the proposition(s) framed /question(s) as raised for adjudication by the authority.

Going by wisdom from past experience, – that has miserably failed to be gathered, and is continued to be over sighted, – is this; Unless the points of dispute are adequately and intelligibly addressed by framing the proposition(s) consciously with the utmost professional care as desired, and expected of, there is every possibility of the adjudicating authority failing to appreciate the issues in proper light, after considering from all angles and giving a well- balanced opinion, as desired.

In this context, the Order of the ITAT in re. Anil M Gehi’s case, being another such instance that perforce comes to mind.

In that case, the question as framed by the Revenue for reference to HC read:

“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the foreign currency of Rs. 4,56,980 confiscated by the customs authorities should be allowed as a loss to the assessee under section 69 A,…  ”

However, the Tribunal, in its wisdom (or lack of it!), chose to, and re-framed the question and referred it to the High Court as under:

“Whether, the foreign currency of Rs. 4,56,980 confiscated from the assessee was allowable as a loss to the assessee.”

The referred question was, as may be readily noted, so brief as that had omitted to bring to focus all such relevant points of dispute as were required for the Court to give a well-considered and proper opinion.

Obviously, it was failed to appreciate that despite the old proverb – brevity is the soul of wit, – in matters of law, especially in court proceedings, brevity at the cost of clarity may result in an unintended or undesirable consequence. That it actually turned out to be so is borne out by the fact that, in the Court’s judgment, in answering the referred question, as the relevant section 69A found no mention, was not gone into and duly considered.

For a detailed discussion of that Judgment, suggest to look through the Case Study vide the Article published in, – (2006) 156 TAXMAN 121 (ART).

2. In BC’s case, had the Revenue, – even if not the other party, – agreeing to the suggestion from the Bench (see Para.2.of the Order), minded to heed and spared time for having the Proposition (s) framed in a comprehensive manner, with focus on the aspects requiring to be concertedly gone into, that would possibly have greatly helped, rather tilted the Bench’s line of reasoning and the opinion given, though rightly even otherwise, on better grounds; so as to be clearly understood and duly followed in Revenue’s favour subsequently, with no hesitation, in not just JC’s, case, but in  other like cases in which , in principle, the opinion handed down has far more serious consequences / ramifications than in JC’s case. In saying so, one has in mind the peculiar fact that JC’s holding in the investee – company was quite substantial; and, before so also after capital reconstruction, constituted 99% or so.

No need to separately mention, -and there is no gainsaying, – that, had the DR in BC’s case, instead of remaining muted, actively participated in, and done his bit, the Bench would have been enabled even at the outset, to get a clear idea of what precisely the ground (s) on which arguments were going to be addressed, by either party, for its adjudication.

3. To recapitulate (for ready reference):

3.1. The point of issue, as thought fit, hence reframed and set out in the original Article  (for short , herein after referred to as ‘earlier’) reads thus: –

Whether a reduction of ‘’equity share capital” by a company, for writing off, in the books of account, the accumulated losses of past years (in a given previous year), is tantamount to a “transfer” by its shareholder (s) (the SH), entitling the SH to claim a loss assessable under the head of “Capital Gains”, IN THE PREVIOUS YEAR OF SUCH WRITE-OFF.

(FONT supplied)

Split up and better put, for enabling a componential analysis:

a) The reduction was of equity / ordinary share capital (not preference share capital);

b) such a restructure of capital was to, for sake of good order, formally write off the accumulated losses of past years;

c) the company, on its own motion/ volition, rather to adhere to the strict accounting principle /standard, though belatedly, decided, and wrote off the ‘lost capital’, through over due book entries in the previous year of relevance; and

d) that is the only reason /ground why, relying on such write off by the operating company, JC chose to, and claimed, as resulting loss admissible to it for the subject assessment year.

It may have to be specially noted that, the company could have decided to so write-off the ‘lost capital’, even in anyone of those earlier years. Irrespective of such write-off, the fact remains that the intrinsic value /equity interest of JC has been eroded and stood depleted, over the past years, and on a year to year basis. That being so, – despite the stance taken by assessee and upheld by the ITAT, – this is an instance in which the proposition that, – the expression ‘extinguishment of any rights therein ‘will have to be confined to the extinguishment of rights on account of transfer; and cannot be extended to mean any extinguishment of rights independent of or otherwise than on account of transfer,- makes every sense, and should hold good.      

With due focus on the foregoing as a backdrop, if were to look through the ITAT’s Orders, no arguments are seen to have been advanced, hence not gone into by the ITAT, as to why, in any view, or from a better perspective, the assessee’s claim was not entitled to be allowed in the assessment for the previous year ended 31-03-2014 (Asst. Year 2014-15).

It will be appreciated that, as spelt out succinctly in the relevant provisions of sec 45, any income (or loss) is chargeable / deemed to be chargeable as income of “the previous year in which the transfer took place”; not in any year as chosen by assessee. Premised so, it stands to no reason why the assessee’s claim came to be admitted / entertained, though not made strictly in accordance with the law as aforesaid, in the cases of BC and JC as well.

In JC’s case, in the Accountant Member’s separate Order of Dissent, the issue has been specially discussed, under, – “III. IS THERE ANY LOSS TO ASSESSEE ON REDUCTION OF CAPITAL?

(Paragraphs 50.1….to 50.8………).

Inferably, the clinching requirement of sec 45, as pin pointed herein above, is, same as in BC’s case, seen to have been over sighted.

3.2. On the facts as narrated, the admitted factual position is that the operating company had no ‘accumulated profits’ . As such, the payment said to have been made to and received by JC has to be taken to have been made only out of the operating company’s ‘capital’. At best, such a payment could have the characteristics of a ‘capital receipt’; hence not exigible to tax.

The payment has been made by the investee-company to its shareholder as per court’s order approving of the scheme of ‘capital reduction’. Even so,  the legality or legitimacy of such a payment is highly questionable. For, a company having ‘lost capital’, as per the company law, is not permitted to make a payment either by way distribution of dividend, or otherwise, out of accumulated losses. Stated differently, the fact that as per the court’s order/ its direction, the company made a payment to JC, its substantial shareholder, – to put it in the least offensive manner, – seems to be   in violation of the tenets of the company law. In any view, the amount paid cannot be regarded to constitute ‘çonsideration’received by JC as envisaged by sec 48; more so, as consideration for any ‘transfer’,  even as per its inclusive meaning of sec 2 (47), or within its legal connotation as otherwise commonly  understood and/or accepted/acceptable. 

3.3 The case law cited and mainly relied upon, by/on behalf of the assessee, are in cases in which the operating company’s capital in the form of ‘preference shares’, not ‘ordinary shares’, that came to be restructured. Further, payment made to shareholders was out of accumulated profits, not out of accumulated losses as in BC’s and JC’s cases. Those decided cases do not, therefore, seem to, as viewed and considered in hind sight, lend any support or claim made by both BC and JC. 

3.4 As specified in,- and according to a straight forward reading and understanding of- the opening words of the machinery provision for computation, – that is, sec 48,the presence of ‘consideration’ is a must; and if, in a given case, there be no valid or real ‘consideration’, any exercise to compute any gain or loss would prove a non-starter. 

Aside: To believe or urge, or to hold out otherwise, will be an attempt at flying in the teeth of the very basic principle as enshrined in the law on contacts- that is, as per the “Theory of Formation of Contract” on which the law is founded. In other words, in the absence of ‘consideration’, being an inevitable concomitant, no contract agreement is lawfully enforceable. 

4. As earlier pinpointed, in computing the loss claimed, actual cost of acquisition has been increased, by factoring in “Indexation”. Prima facie, that does not seem to be correct; also offends any thinking based on even common sense. May be, there is a not-so-obvious lacuna, of a grievous nature, in the governing provisions. If so, that requires to be plugged in, with suitable correctives. That is better done soon, than later or never.

On this aspect, the relevance or otherwise of the implications of the amendment(s) of the applicable sections of the Act, as discussed and critically analysed in the article published in – (2018] 91 taxmann.com 39 – deserve to be made a conscious note of.  

5. With a view to reiterating and reinforcing some of the most crucial aspects discussed earlier (see Para. 3.2. in the original Article), a gist thereof is furnished below, for ready reference:

Section 2 (47) specially defines the term transfer”, specifically “in relation to a   CAPITAL ASSET”.

The term “CAPITAL ASSET”, as separately defined in sec. 2 (14) means all those items specified in several clauses thereto; of which, clause (a) is of relevance herein.

The expression ‘property of any kind’ is patently intended to cover within its ambit both tangible and intangible properties. As such, the basic characteristics of the property in a given case might have to be borne in mind, for deciding whether or not, in that case, there has been a ‘transfer’, within its commonly understood sense, or within its statutorily extended meaning.

The capital asset under consideration in JC’s case, same as in BC’s case, is in the form of Ordinary (Equity) shares held in a company.

Equity share in a company is an intangible asset. It is a creature of the company law.  Conceptually, it represents, and comprises, a bundle of inseparable rights; so inseparable that no single right comprised in such a bundle is amenable to being separated and ‘transferred’ by any of the modes as envisaged by the law.

In the case of a company, no shareholder can exercise any of the imbedded rights; say, to vote, or to dividend or bonus share, unless and until the company decides to and calls a meeting; also decides to declare a dividend or issue bonus shares.

And, it is only in the event of winding up / liquidation, that equity share holder, as a member, becomes entitled to claim for settlement by the company of his equitable interest in its net worth.

Any holder of preference shares in a company has, in comparison to a holder of equity shares, very limited rights. In short, there are quite significant differences in the respective rights of a equity and preference shareholder.

6.1. In the course of the appeal proceedings, undue emphasis has been laid, and stressed on the fact that the assessee has been holding shares as a ‘capital asset’, not as ‘stock-in-trade’.  This is an aspect which has also been stressed, rather unduly, in the Accountant Member’s Order of dissent in JC’s case, as one of the grounds on which he has been inclined, rather has persuaded himself, to decide the dispute in assessee’s favour.

Be that as it may, personally, one is unclear, or left totally confused over the validity of such overemphasis on the distinction between the two legal concepts of ‘çapitäl asset’ and ‘stock-in-trade’. For, so far as one’s limited knowledge goes, such a distinction is of relevance, mostly for the limited purpose of deciding under which of the two heads namely,  ‘capital gains’ or ‘profits and gains of business’, income arising on its transfer (sale) should be assessed ; not for any other propose. To be precise, in either situation, the basic characteristics of the property, being equity shares held in a company, do remain the same, and intact.

6.2. In the appeal proceedings, in both the cases of BC and JC, the Case law mainly cited, in support of or to counter the arguments advanced, are,: –

Kartikeya V Sarabhai

CIT vs. Mohanbhai Pamabhai

CIT vs. G. Narsimhan (Decd) And Ors.

Anarkali Sarabhai vs. CIT

CIT vs. Grace Collis & Ors.

Vania Silk Mills Pvt. Ltd. vs. CIT

Those are cases decided, having regard to the governing and applicable provisions of the erstwhile company law of 1956. That has, as is common knowledge, since been repealed by a new legislation – the Act of 2013-, which is now in force. As such, it becomes necessary to have a fresh look into all related issues in general, and such issues as related to “restructuring of capital”, in particular.

RESOURCES (for a study): 

https://www.google.co.in/search…

Details of Procedure to follow as summed up-

@ https://taxguru.in/company-law/nclt-procedure-for-reduction-of-share-capital-of-company-rules-2016.html

In section 66, of the Act of 2013, the relevant portion thereof reads:-

“(2) An application to confirm a reduction of share capital of a company shall be accompanied with –

(a) to (c)…  

(d) a certificate by the company’s auditor to the effect that the accounting treatment proposed by the company for the reduction of share capital is IN CONFORMITY WITH THE ACCOUNTING STANDARDS SPECIFIED IN SECTION 133 OR ANY OTHER PROVISIONS OF ACT.” (FONT supplied)

Briefly said, therefore, because of being obliged to be directly involved, the CAs in practice, and engaged for such certification job, as is to be readily imagined, have a fresh challenge to face and meet with. The above highlighted portion calls for a special attention and insight. ICAI , as the regulatory body, has a significant role to play/contribution to make, for ensuring that its concerned members are provided,in advance,with proper  guidelines for them to follow. 

The related literature available as at present would require a close re-look through and substantially modified /updated, to the extent as found necessitated. For a ready sample, look up:-

Internal Reconstruction – ICAI Knowledge Gateway

>www.icaiknowledgegateway.org/littledms/folder1/internal-reconstruction.pdf  –

7, Reproduced / furnished below Links for, some of the other related material, indicating the respective RESOURCES to be gone through, being   available in public domain, so as to help an independent study (:

♦ http://community.boredofstudies.org/331/law/170192/transfer-shares-choses-action.html

Under s 1070A(1) of the Corporations Act 2001, shares are regarded as personal property – the share’s wealth being represented by the proportionate interest in the net assets of the corporation. Shares may be transferred, sold or left in a person’s will. Furthermore, the High Court in Pilmer v The Duke Group (2001) 19 ACLC 1172 has indicated that: “Once issued, a share comprises a collection of rights and obligations relating to an interest in a company of an economic and proprietary character, but not comprising a debt.” Despite this, there is still some discussion about the exact nature of this proprietary interest (see H Bird, ‘A Critique of the Proprietary Nature of Share Rights in Australian Publicly Listed Companies’ (1998) 22 Melbourne University Law Review 131).

♦ “Capital Asset being shares”- being the concept as discussed in the critique on the infamous Vodafone case ((2009) 176 Taxman (Mag) 82)

♦ Case law  (landmark judgments) in which the basic concepts of company, shareholding , RIGHTS X INTEREST, et al, have been gone into in-depth, in the context of issues adjudicated upon; specially in relation to taxation of income/gains under a transaction of “TRANSFER”

For a discussion of some of those Judgments, based on a critical study and independent analysis thereof, Articles published, selectively:

> SHARES /STOCKS – CAPITAL ASSET or STOCK-IN-TRADE – A fresh Look @ (2006) 153 TAXMAN 126

> TAXATION Of CAPITAL GAINS – A Poser @(2006) 5 CAT 432

> HIGH COURT’s Decision in re.VODAFONE –  An Analysis – (2009) 176 TAXMAN 82

8. For the above suggested purpose of understanding the implications /intricacies of the new company law (2013), useful guidance may be found in the reported case of, –

Vaibhav Global Ltd vs … – Indian Kanoon 

In that Rajasthan HC  Judgment, a related dispute has been adjudicated upon, having regard to the provisions of the new Act, corresponding to inter alia     sec. 100 of the Act of 1956.

In one’s independent perspective, and firm opinion, points of contention, which could have been specifically focussed on and addressed, adequately and sufficiently, but seemingly not so done, by the Revenue are as under:

♦ Various RIGHS of SHAREHOLDERS and REDUCTION OF CAPITAL

♦ Share Holder X Equity Holder

These terms both mean an ownership interest in a business, but there are some differences between them.

Both these terms are used to describe an ownership interest in a company, but don’t have the exact same meaning. Specifically, shareholders are a particular type of equity holders. “Equity holders” is a broader term that refers to shareholders as well as everyone else with an ownership interest in a business.

There are, as lucidly explained, two main types of shares- common and preferred. Common stock refers to most of the stocks that are traded on the major exchanges and the price and dividends paid can fluctuate over time. A share of stock entitles the owner to a portion of the company’s success or failure, and also entitles them to vote for the company’s board of directors, but does not come with any operational control of the business. If a company does well, common shares can increase in value.

On the other hand, preferred stock represents an equity interest that pays a set dividend amount, quarter after quarter, and year after year. Because of this, the price of preferred stock is tied to the dividend amount and the company’s financial strength or credit rating, not the profitability of the business.

To sum up (in own words): The crux of the points of view urged is that, –   all shareholders are equity holders, but not all equity holders are shareholders. It is possible to have an ownership interest in a business that does not issue shares of stock.

♦ http://community.boredofstudies.org/331/law/170192/transfer-shares-choses-action.html

Re: transfer of shares / choses- in- action

Under s 1070A(1) of the Corporations Act 2001, shares are regarded as personal property – the share’s wealth being represented by the proportionate interest in the net assets of the corporation. Shares may be transferred, sold or left in a person’s will. Furthermore, the High Court in Pilmer v The Duke Group (2001) 19 ACLC 1172 has indicated that: “Once issued, a share comprises a collection of rights and obligations relating to an interest in a company of an economic and proprietary character, but not comprising a debt.” Despite this, there is still some discussion about the exact nature of this proprietary interest (see H Bird, ‘A Critique of the Proprietary Nature of Share Rights in Australian Publicly Listed Companies’ (1998) 22 Melbourne University Law Review 131).

chose in action | India Judgments | Law | CaseMine

9. To suit the context herein(: 

♦ ¨Whenever a Court breaks new ground, the development and recognition of new rights is often accompanied by the birth of problems surfacing also for the first time.  New doctrines must be cautiously applied and no Court can shirk its duty if it finds that the power has been rightly invoked.

♦ Referring to a certain statute, Lord Reid said that he found it impossible ‘to discover or even surmise what the draftsman can have had in mind’. Commenting on the language in which different Acts or Parliament were couched, various authorities have expressed their deep dissatisfaction. “Laxity or ambiguity of expressions…’ was the verdict of the Statute Law Commissioners in 1835. ‘There is at least on passage in it which is absolute nonsense,’ observed Vice-Chancellor Kindersley in 1854. “Verbose and tautologous,” was the comment of the Master of the Rolls in 1834. “That chaos of verbal darkness,” was how Lord Justice McKinnon described a British statute in 1944. “Absurd,.. “ said justice Harman about another law in 1958.

♦ ¨The administration of justice has become so obsolescent that most people regard the law as an enemy rather than as a friend. The law may not be an ass but it is certainly a snail: the operation of our legal system is not merely slow but is susceptible to the most shameless delaying tactics, and resort to the courts has become a costly lottery which takes years in the drawing.

♦ ¨The Ideal of Excellence:

Lord Devlin pointed to three major defects in the present legal system in Britain: the availability of legal services depends upon wealth rather than need, mitigated only marginally by legal aid, which rightly has a low priority among the social services: justice is defined by an adversary system which is costly and primarily protects only the better-offs; and the focus of the system on protecting property tends to obliterate the social responsibility of lawyers. Those words apply equally to the situation in India. Though the problem of the administration of justice is so vast and so urgent, we have not even started nibbling at it.

♦ ¨There can be no excellence in the law without excellence in lawyers.

♦ ¨‘Professionally speaking’

The legal profession at the highest level develops absorptive and analytic capacities of the human mind and offers great intellectual stimulus. It is no small service to be called upon to defend life, liberty and the other fundamental rights.

But a large degree of equipment is needed to discharge such duties properly. A lawyer with a well- furnished mind alone can be truly a counsellor at law; he alone can, not merely look up precedents, but guide his client along the path of wisdom, even of generosities which may appear irrelevancies to the preoccupied client. in the hands of such a lawyer, the law represents the application of reason to noble and purposeful ends.

Above are memorable excerpts, of immense guidance value, making for a delightful and enlightening reading; randomly selected from the popular published speeches and articles of N A Palkhivala- Source: Books – WE, THE PEOPLE and We, the Nation THE LOST DECADES.)

To sum-up

Proceeding on the premise that the viewpoints canvassed above, do not suffer from any faulty logic, but expose a better line of reasoning to be adopted , all other propositions or arguments as respectively addressed by both sides in JC’s case, – particularly, as set out in the Order of Dissent authored by the Accountant Member of the Spl. Bench –  and sought to be supported / stressed relying on case law, do not seem to hold any water / carry any conviction; and as such, might fall like a pack of cards, on a gentle touch by a finger or a whiff of air, so to say. 

The legal concept of, – ‘shares’ in a company is, indisputably, a specially designed creature of the company law. And, by virtue of shareholding, its holder has an ‘ownership interest’ in the investee -company. Nonetheless, such interest of a share holder in a company is not the same but is quite distinct,- in more than one respect, including its attendant legal implications /consequences.- from ownership interest a partner has in a partnership or a member has in a HUF.

RESOURCE:

Equity in a Company X Ownership Interest in a ‘Partnership’, ’HUF’, etc.

10. In both the cases of BC and JC, the judgment in re. CIT vs. Grace Collis & Orshas been cited and heavily relied upon on assessee’s behalf; but countered by the Revenue. Notwithstanding that, the referred court case seems to have  no direct relevance or application to the factual matrix, or even remotely for deciding the points of dispute centered on , apart from the rest, a proper construction of the crucial term ‘extinguishment of any rights therein’ employed in the inclusive definition of “transfer” as embodied in sec 2 (47) (ii) of the IT Act (of 1961).

10.1. In  CIT vs. Grace Collis & Ors(supra), as is distinguishable, the dispute was pivoted on the construction to be rightly placed on the term-  ‘exchange of the asset’, being shares held in a company, under amalgamation.
  
Looking way back decades ago, a study of the old case law, deciding more or less on a similar issue raised under the 1922 Act, may be found to provide a frightful glimpse into the field reality,- as regards the eminence or want of it, or quality of advocacy, prevailing then, and onwards and until.now, with no materially significant difference.
  
For instance, look at the random selected case of Rasiklal Maneklal case, reported @
https://indiankanoon.org/doc/1913191/

Incidentally, to be noted, that is a case also cited and gone through in the proceedings in Grace Collis case, as well.

10.2. For ready help, and a better appreciation, an extract, as selected, from that Bom. HC Judgment, is furnished below:

Q

Reliance was placed by Mr. Joshi upon two decisions of the English court in Royal Insurance Co. Ltd. v. Stephen and in Westminster Bank Ltd. v. Osler (inspector of Taxes). The first of these decisions is a decision of the King’s Bench Division while the latter is a decision of the House of Lords. THOUGH UNDOUBTEDLY WHILE RECITING THE FACTS IN EACH ONE OF THESE CASES, THE WORD “EXCHANGE” HAS BEEN USED, THE QUESTION WHETHER THE TRANSACTION AMOUNTED TO AN EXCHANGE WAS NEITHER CANVASSED NOR GONE INTO AND WHAT WAS MERELY CONSIDERED WAS WHETHER THERE WAS A REALISATION AS A RESULT OF THE AMALGAMATION SCHEME. (Para.9.)    

Even in the decision of Westminster Bank’s case, the House of Lords has not considered the question whether the transaction amounted to an exchange and the question that arose for consideration was merely whether it was a realisation having regard to the facts of the case. Neither of these decisions is, therefore, of any assistance to us in determining the meaning of the word “exchange” as appearing in section 12B of the Act.(Para.10)

The question then arises whether there is relinquishment as a result of which capital gains have accrued to the assessee. The word “relinquishment” is neither defined in the Act nor any other statute to which our attention has been drawn. However, the essential features of a transaction of relinquishment can be clearly specified. In a transaction of relinquishment the property in which interest is relinquished continues to exist; the property continues to be owned by some person or persons even after the transaction of relinquishment and the interest of the person relinquishing his interest in the property is either given up or abandoned or surrendered….. and, therefore, such a transaction can in no sense of the term be regarded as a relinquishment as understood either in law or in common parlance. Relinquishment also presupposes that the property in which the interest is relinquished continues to be in existence. In this case, upon dissolution of Shorrock company the shares of that company have become a scrap of paper and of no value.  (Para. 11.)

10.3. It is through the since amended provisions of sec. 47, and obtaining as of now, the correct position in law as borne out and eventually settled by the cited apex court Judgment, after decades of a long drawn  battle in courts, has been given statutory recognition, by suitably reframing the applicable law. The point to be specially noted is that, in doing so, wherever the context requires, the expression used is ‘capital asset being shares’ (or ‘shareholding’) as wanted /stoutly canvassed for.

11. In winding up (:

The longstanding and nagging doubt, in one’s own mind, –

Is it not, as a matter of upholding judicial ethics, founded on judicial discipline, with a view to put an end to the ongoing inconsistent decisions by adjudicating authorities, especially in matters of disputes under tax laws, -ignoring the technicalities or super technicalities, if any the apex court, in exercise of its vested / inherent powers, need to seriously consider, and come out , sooner than later or never, with a sort of “commandment”, declaring that once an “issue” – a pure question of law, – is settled by say, special Bench of ITAT, that should be followed by all other Benches of ITAT in the whole of India.

One such matter in which, ignoring the Spl. Bom. Bench Order (majority decision) in Bennett Coleman’s case, the Bangalore (2 Member) Bench has preferred to and handed down a diagonally opposite opinion on a pure and simple question of law.

RESOURCES

♦ Experts’ Commentary and Case Law cited, in the leading (Palkhivala’s) TEXT Book Tenth Edition, Volume I, – under “PRECEDENTS” – 42. ‘Reliance on Decisions’

¨Larger Bench Decisions Are Binding In Nature

Recently, the Supreme Court considered a matter concerning binding nature of decisions of its larger bench in the case of Pradip Chandra Parija v …….

♦ ¨Experts’ commentary and cited case law in the above referred Text Book  under inter alia sections  2 (31), 2 (47), 2 (14), 9 (1), 48  and 45, – it is strongly recommended, preferably in that order – should be gone through, for getting a reasonably harmonious  grip of the scheme of things of every relevance in the context herein.

Disclaimer: The analytical study undertaken herein, for satisfying, if nothing else, own academic interest, is mainly with a view to having one’s independent thoughts cleared and courage of conviction consolidated and firmed up ; and, incidentally, sharing with equally interested others, with the object to thereby try and stimulate ideas and thoughts that hopefully will help others in aiming at an independent contribution of some value in its true sense; but, in the ultimate analysis, altruistically for the common good in its profound sense.

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