1. One Karamchand Premchand (P.) Ltd., was indebted to the assessee-company. For the satisfaction of this debt, two deeds of assignments were made. By one of the deeds of assignments, a debt due from one Telerad (P.) Ltd. ('Telerad') was assigned to the assessee.
According to that deed, the assessee was entitled to receive an interest of 4.25 per cent over and above the bank rate. On behalf of the assessee it was contended before the Tribunal that there was an oral agreement between the parties that the interest should be charged only at the rate of 11.25 per cent and that the subsequent conduct of the parties in adopting an effective rate of interest at 11.25 per cent showed that the earlier agreement had been changed. The Tribunal did not accept this contention on the ground that the written agreement between the companies could not be changed later on orally and that the conduct of the parties could only help in interpreting the agreement when doubtful but could not change it when it was clear.
2. Telerad had debited interest at the rate of 11.25 per cent in its books of account and the assessee had received and credited the said interest at the rate of 11.25 per cent only.
3. On behalf of the assessee it was urged that since the assessee had, in fact, received interest only at the rate of 11.25 per cent, he could not be taxed on the basis of a mere accrual. The argument was that there was no real income which could be taxed. This part of the argument remained to be dealt with in (he earlier order of the Tribunal and, therefore, the assessee moved a miscellaneous application which we have heard and we shall now deal with it.
4. The learned counsel for the assessee has relied on what is generally known as the real income theory and cited the following authorities in support of his contention : H.M. Kashiparekh & Co. Ltd. v .CIT [1960] 39 ITR 706 (Bom.), CIT v. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC), CIT v. Birla Gwalior (P.) Ltd. [1973] 89 ITR 266 (SC) and CIT v.Motor Credit Co. (P.) Ltd. [1981] 127 ITR 572 (Mad.).
He has urged that the assessee had by his conduct forgone the extra interest over that which it received.
5. On the other hand, the learned departmental representative has relied upon the decision in the case of Zaverchand Laxmichand & Co. v.CIT [1965] 55 ITR 486 (Guj.) and the decision of the Calcutta High Court in the case of James Finlay & Co. v. CIT [1982] 137 ITR 698.
In this case the payments were recorded by book entries in the books of the assessee-company and the debtor company Telerad. On this point, the learned counsel relied upon the decision of the Gujarat High Court in the case of CIT\. Amitbhai Gunvantbhai [1981] 129 ITR 573.
6. In the case of H.M. Kashiparekh & Co. Ltd. (supra), the assessee maintained mercantile system of accounting and under its managing agency agreement, was bound to forgo one-third of its commission due to it from the managed company where the profits were not sufficient to pay a dividend of 6 per cent. The assessee-company passed a resolution giving up a stated amount out of this commission (at page 717). The Tribunal held that the assessee was bound to forgo only a certain amount and the balance was given up only for reasons of commercial expediency which it, therefore, included in the assessee's income. The High Court allowed the entire sum including the sum that was given up on the ground of commercial expediency holding (at page 721) that it was liable to be taxed and that the real income could not be arrived at without taking into account the amount forgone by the assessee although subsequent to the close of the accounting year.
7. In the case of Shoorji Vallabhdas & Co. (supra), although the assessee was entitled to managing agency commission at the rate of 10 per cent, agreed later on to give up 75 per cent thereof and accept commission only at the rate of 21/2 per cent. The accrual had taken place in the period relevant to the assessment year but the agreement to give up took place subsequently. The Supreme Court held as follows : ... Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account. (pp. 144 45) 8. In the case of Birla Gwalior (P.) Ltd. (supra) the assessee-company was entitled to certain managing agency commission from two managed companies. It gave up the commission from both the companies for the assessment years 1954-55 to 1956-57, after the end of the relevant financial years but before the accounts of the managed companies were made up. No due date was fixed for the payment of the commission under the managing agency agreements. The commission receivable could have been ascertained only after the managed company made up its accounts.
The Supreme Court held (at page 270) that the mere fact that the assessee-company was maintaining its accounts on the basis of mercantile system could not lead to the conclusion that the commission had accrued to it by the end of the relevant accounting year.
9. In the case of Motor Credit Co. (P.) Ltd. (supra) the Madras High Court held that the Tribunal was right in its conclusion that though the assessee had adopted the mercantile system of accounting, no interest income could be assessed in its hands on accrual basis as it would be very unrealistic on the part of the assessee to take credit for a highly illusory interest. In that case the assessee-company was advised that there was no prospect of recovering even the principal amount and the assessee-company did not credit the interest on the outstanding from the two companies even though it was adopting the mercantile system of accounting. In that case the first two cases cited above have been considered.
10. In the case of Zaverchand Laxmichand & Co. (supra) the Gujarat High Court has held that the fact that the assessee had received only a certain amount was immaterial for determining the real income on which he was liable to be taxed as mere forbearance from insisting upon the payment of the correct amount of commission would not amount to surrendering a part of the commission on grounds of commercial expediency.
11. In the case of James Finlay & Co. (supra) there was no clear assertion on the part of the assessee to give up the interest. What was done was that the interest that had accrued was credited in suspense account. The assessee was very much keeping alive the claim for interest. The High Court held that since there was no agreement replacing the claim for the interest under which the interest accrued in the year of account and the fact that the interest was purported to be not realised or kept in the suspense account long after the expiry of the accounting year, though there was some trouble in the year of account of realisation in correspondence, the germ or root had been not transplanted under which there might be either a fresh agreement waiving interest or any clause for keeping it in the suspense account during the year of account, in its opinion, that conduct could not prevent the accrual of income. The High Court also held that as there was no claim of the waiver of interest at all, the amounts in question formed part of the assessee's income.
12. It can be seen that in the cases cited by the learned counsel for the assessee, the claim of the assessee was actually given up by some positive overt act. In the case of H.M. Kashiparekh & Co. Ltd. (supra) there was a resolution of the board of directors. In the case of Shoorji Vallabhdas & Co. (supra) there was an agreement to give up part of the assessee's claim. In the case of Birla Gwalior (P.) Ltd. (supra) the Supreme Court could not even conclude that commission had accrued to the assessee by the end of the relevant accounting year. That case turned on the fact that the commission receivable could have been ascertained only after the accounts of the managed company were made up and the commission was given up before that time. In the case of Motor Credit Co. (P.) Ltd. (supra) since there was no prospect of recovery of even principal amount, the question of accrual of interest thereon did not arise. The resulting position is that the claim must have been given up by the assessee. That is not so in the present case. We are of the view that there must be some evidence of positive act of waiver of its claim by the assessee. The reason is simple. Accrual means the right to receive the income, i.e., debitum in praesenti, solvendum infuturo as held in the case of E.D. Sassoon & Co. Ltd. v. CIT [1954] 26 ITR 27 (SC). It is a vested right with regard to future benefit. The right can be extinguished only by satisfaction or waiver. As stated above in this case there is no evidence of waiver. All that we have, are entries in books of account with regard to the receipt of the lesser amount by the assessee and debit of corresponding amount by the debtor. From this we canot infer any waiver with regard to the balance.
In the case of Zaverchand Laxmichand & Co. (supra) the Gujarat High Court held that mere forbearance from insisting upon the payment of the correct amount of commission could not amount to surrendering a part of the commission on grounds of commercial expediency. Therefore, receipt of a lesser amount cannot take the place of waiver. To illustrate, if A owes Rs. 100 to B and B accepts Rs. 50 it cannot be said that he has given up his claim with regard to the balance of Rs. 50 unless he issues a receipt to A in full and final satisfaction of his claim.
Waiver is necessary to displace the right to receive which is the essence of accrual.
13. The purpose of real income theory is not to obliterate the distinction between the two systems of accounting, i.e., accrual and receipt but to give meaning and content to accrual. Since as stated above the accrual, i.e., right to receive has not been displaced in this case, we hold that the balance over and above the interest received would also form part of the assessee's income. We are also supported in this view by the aforesaid decision of the Calcutta High Court in the case of James Finlay & Co. (supra).
14. In the result, the earlier order of the Tribunal on this point is confirmed.
I have carefully gone through the order made by my learned brother.
With utmost respect I am unable to agree with the conclusion reached by him. The facts leading to the controversy are not in dispute and they have been correctly stated in the above order made by my learned brother. The controversy, however, is whether the interest above 11.25 per cent could be taxed on accrual basis. Briefly stated the facts are that by deed of assignment a debt due from one Telerad, was assigned to the assessee and according to that deed the assessee was entitled to receive interest at 4.25 per cent over and above the bank rate. On the above footing and on the basis of bank rate as 7 per cent up to 30-9-1974, the assessee was entitled to interest at 11.25 per cent. On 30-9-1974, i.e., on the last day of the accounting year the bank rate stood at 9 per cent and on that footing the interest receivable worked out to 13.25 per cent. It is not in dispute that the assessee had received interest at 11.25 per cent only, i.e., on basis of old bank rate of 7 per cent plus 4.25 per cent. Telerad had also debited interest in its books at 11.25 per cent. Thus, though the assessee had the right to receive the interest at 13.25 per cent, it in fact and truth recorded interest receivable at 11.25 per cent only. The point for consideration is whether the interest at 2 per cent could be said to have accrued to the assessee on which it could be subject to tax.
The assessee admittedly maintains accounts on mercantile system of accounting. It is true that the mercantile system of accounting postulates taxing of income on accrual basis even though the same may not have been received yet. In mercantile system of accounting the tax has to be levied on the basis of real income and not on the basis of hypothetical income. In CIT v. Ferozepur Finance (P.) Ltd. [1980] 124 ITR 619 (Punj. & Har.) the following principle is laid down, after considering the decision of the Supreme Court in the cases of Shoorji Vallabhdas & Co. (supra) and CIT v. Chamaitlal Mangaldas & Co. [1960] 39 ITR 8. It reads as follows : Income-tax is levied on income, whether the accounts are maintained on mercantile system or on cash basis. If income does not result at all, there cannot be levy of tax. Even if an entry of hypothetical income is made in the books of account, where the income does not result at all as there is neither accrual nor receipt of income, no tax can be levied. (p. 619) The above test lays down that even if an entry of hypothetical income is made in the books of account, where income does not result at all as there is neither accrual nor receipt of income, no tax can be levied.
In the instant case even the entry showing the accrual of interest has not been made and it is not disputed that payer had debited interest at 11.25 per cent in its books of account and the assessee has made a credit entry for the corresponding amounts. The Gujarat High Court in the case of Amitbhai Gunvantbhai (supra) : The basic principle is the same in the law relating to income-tax as well as in civil law, namely, that if there is no challenge to the transaction represented by the entries or to the genuineness of the entries, then it is not open to the other side-in this case the revenue-to contend that that which is shown by the entries is not the real state of affairs. . . . (p. 580) The entries in the books made by the other parties clearly support their stand that the amount of interest stood debited in the books of Telerad and credited in the assessee's books at the old rate of 11.25 per cent. There is no challenge to this entry on the ground that they were collusive and did not represent the real state of affairs. In this view of the matter, therefore, I am of the view that the additional interest at the rate of 2 per cent could be said to have been impliedly waived by both the parties and the said additional interest at the rate of 2 per cent is not exigible to tax on accrual basis. I would, therefore, uphold the claim of the assessee.
There being a difference of opinion amongst us, the matter is referred to the President under Section 255(4) of the Income-tax Act, 1961 ('the Act') in respect of the following : Whether, on the facts and in the circumstances of the case, the assessee-company was liable to tax in respect of interest on the debit assigned to it from Telerad (P.) Ltd., at the rate of 13.25 per cent and not at the rate of 11.25 per cent, on accrual basis 1. The assessee private limited company, which is an investment company, is a wholly owned subsidiary of Karamchand Premchand (P.) Ltd. The holding company owed amounts to the assessee-company mostly on account of share allotment. In satisfaction of this debt the holding company transferred debts due to it from two allied concerns Sercon (P.) Ltd. ('Sercon') and Telerad. Sercon owed Rs. 77,99,850 to the holding company and Telerad Rs. 21,81,970. The assignments were made by tripartite assignments-agreements, dated 22-9-1973, in respect of each of the debts. In the deeds of assignment it was stated that the assessee-company would be entitled to receive interest at the rate of 4.25 per cent over and above the bank rate. As far as the assignment of Sercon was concerned it would appear that letters were exchanged by the parties and resolutions were passed indicating that though the deed of assignment specified interest payable as above, the original creditor himself, namely, Karamchand Premchand (P.) Ltd., not being entitled to any interest, Sercon had no liability to pay interest. In relation to the assignment of the debt from Telerad it was claimed by the assessee that interest was to be charged at 11.25 per cent only. As a matter of fact, for part of the previous year the bank rate being 7 per cent, 4.25 per cent above that stood at 11.25 per cent. The bank rate having gone up to 9 per cent as per the assignment deed the rate of interest should have been 13.25 per cent. The ITO, however, accepted the assessee' claim that 'orally' the interest rate has been fixed at 11.25 per cent in relation to both the debts.
2. Starting proceedings under Section 263 of the Act, the Commissioner directed the ITO to make the assessment on an interest rate of 13.25 per cent consequential to the increased bank rates. The Commissioner's order came up on appeal before the Tribunal who by its order dated 7-8-1981 deleted the interest at 11.25 percent in relation to the first assignment, namely, Sercon but with regard to the other assignment, namely, Telerad the Tribunal observed that written agreements between companies cannot be changed later on orally and the conduct of the parties could help only in interpreting an agreement when doubtful but not when it was clear. The order of the Commissioner with regard to the second assignment, therefore, was upheld.3. The assessee came up with a miscellaneous application before the Tribunal claiming that of the two arguments advanced before the Tribunal relating to the assignment in respect of Telerad, the legal proposition was dealt with by the Tribunal but not the factual one relating to the claim of 'real income'. On the basis of well established principles of taxation of 'real income' the assessee's case was that the interest from Telerad also could not have been taxed on the basis of a higher rate but only at the rate of 11.25 per cent. The miscellaneous application prayed for a rectification of the Tribunal's order considering the taxability on the basis of 'real income'. By its order, dated 26-4-1982, the Tribunal accepted the assessee's contention and fixed a fresh hearing with regard to the alleged omitted ground.
After hearing the parties the learned Judicial and Accountant Members passed different orders, the former confirming the Tribunal's earlier order and the latter accepting the assessee's claim that interest at the rate of 11.25 per cent alone could be taxed. On the difference of opinion between the Members as above the following has been referred to me as Third Member for resolution.
Whether, on the facts and in the circumstances of the case, the assessee-company was liable to tax in respect of interest on the debit assigned to it from Telerad (P.) Ltd. at the rate of 13.25 per cent and not at the rate of 11.25 per cent, on accrual basis 4. The learned counsel for the assessee took us in detail through the facts of the case leading to the acceptance of an interest rate at 11.25 per cent. Even though originally the agreement referred to an interest rate of 4.25 per cent above the bank rate, there was some misunderstanding about the whole position with the result that even though Sercon did not pay any interest at all to the parent company, the assignment stipulated an interest of 11.25 per cent. In respect of the other assignment the stipulation 4.25 per cent above the bank rate remained. With regard to the former when it was understood that there was some mistake, through letters and resolutions this was corrected and the assessee claimed that no interest was payable. With regard to the second party it was orally agreed that the interest rate should be pegged at 11.25 per cent. Book entries were passed on this basis both in the case of the assessee-company as well as the debtor. Telerad claimed in its assessment a deduction of only 11.25 per cent. There was a complete understanding and a conscious agreement between the parties as to the actual amount of interest chargeable and charged. It was on this basis that the assessee claimed that interest of 11.25 per cent alone was taxable. As a matter of fact, the assessee received only this much interest. The debtor paid interest at that rate and claimed only that much in his own assessment. Even though, therefore, the assignment deed referred to a particular formula for charging of interest as a matter of fact, the rate of interest was fixed at and the real interest received by the assessee also stood at this figure. Neither the ITO who first dealt with the matter nor the appellate authorities subsequently disputed the oral amendments or the conduct of the parties relating to the actual payment of interest or the entries. Whatever be the legal position, according to the learned counsel, as a matter of fact the assessee received only an interest at 11.25 per cent only. This amount only can be said to have accrued to him also. It is well established that only the real income of an assessee can be taxed. Entries, agreements, stipulations, etc., should yield to the real income of the assessee for taxation purposes. The learned counsel relied on the decisions in Shoorji Vallabhdas & Co. (supra), Birla Gwalior (P.) Ltd. (supra) and certain observations of the Gujarat High Court in the case of Amitbhai Gunvantbhai (supra) to support his case. On the question of an agreement in writing being modified by an oral agreement while urging that this proposition as applied to the present case is not factually correct, the learned counsel has pointed that in fact, in the present case the modification was not by an oral agreement but in writing as would be clear by the entries passed in the books. These entries are clear evidence of a written modification of the written agreement especially since they are found in the books of both the parties. Both on the question of real income alone being taxable and even on the question of modification by a subsequent agreement, the assessee's case should be accepted. Alternatively, it is pointed out that if not by modifying the agreement the assessee had by voluntarily giving up a portion fixed the income only at 11.25 per cent, from this point of view also according to the learned counsel, the real income in the present case stood at 11.25 per cent only and this only was taxable.
5. For the department stress is laid on the order of the Commissioner.
According to the learned counsel, there was a clear change in the agreement if at all of a written one by an oral one. This was not permissible under law and the legal proposition set out by the Tribunal in its order really settled the issue. That apart, the real question which arose in the present case was whether in law the parties have reached an understanding about the variation in the rate of interest or they were even competent to come to that understanding. It was necessary to establish this fact in the first place that the parties complied with the formalities as envisaged by law for the purpose of modification of the agreement. It is necessary to prove that competent parties have in fact entered into an agreement. The Tribunal had not come to a conclusion that there was an oral agreement, All that it had held was that even if there was an agreement in law, that was not sufficient to displace the position as obtaining under the written agreement. Whether there in fact was such a modification orally or otherwise has not been established. According to the learned counsel there was no such modification. If the company were to file a suit for recovery of interest at 13.25 per cent it would certainly have succeeded. The mere entries did not indicate any modification or change in the liability. The burden is on the assessee to establish any alteration in the agreement and according to the learned counsel this has cot been discharged. According to him, the contention with regard to the alteration was only an afterthought. In fact even the actual details of the entry were not produced before the authorities or the Tribunal.
In the case of Sercon there were letters, resolutions, etc., possibly having regard to which the Tribunal accepted the assessee's claim.
There were no such details in the present case. In fact if there were any written or other understanding the assessee would certainly have brought out the details earlier. Nor was there any case of a forgoing, or waiver of the interest. There was no conscious forgoing, no evidence to indicate that the receipt of a lesser amount of interest was in full and final settlement of the obligation. Except the alleged entries there was nothing in writing and even this while it may indicate the actual amount of interest debited and credited cannot be evidence of any alteration in the rate of interest to be charged or accepted. Even on the authority of the Supreme Court decision in the case of Shoorji Vallabhdas & Co. (supra) the entry cannot be said to indicate the real income of the assessee. In fact, according to the learned counsel, the assessee has adopted contradictory stands at first claiming that there was an oral agreement for reducing the interest and later on claiming that he has forgone the interest already accrued.
6. The Tribunal in the present case by its order, dated 7-8-1981, held that the debt from Telerad would secure interest at 13.25 per cent and not 11.25 per cent. The Tribunal's reasoning for coming to this conclusion is found in the following from its order : On behalf of the assessee, it has been contended that it was orally agreed between the parties that interest should be charged only at the rate of 11.25 per cent and that the subsequent conduct of the parties in adopting the effective rate of interest at only 11.25 per cent showed that the earlier agreement has been changed. Written agreements between companies cannot be changed later on orally and the conduct of the parties can only help in interpreting the agreement when doubtful but cannot change it when it is clear.
Therefore, in our view, the rates of interest applicable so far as the debt from Telerad (P.) Ltd. is concerned, would be 13.25 per cent after the Reserve Bank of India raised its rate of interest from 7 per cent to 9 per cent.
The above is quoted at length since there was a controversy before me that the Tribunal has accepted the existence of an oral agreement for reduction of interest which led to the argument about the real income of the assessee. A clear reading of the above does not seem to indicate that the Tribunal has accepted the existence of any oral agreement as a matter of fact or even gone into the evidence to support the same. Only the legal position has been expressed to the effect that written agreements between companies cannot be changed later on orally and the conduct of parties can only help in interpreting the agreement when doubtful but not when it was clear. Apparently the Tribunal has not accepted the existence of any oral agreement. That apart the assessee is a company. I have my own, doubts whether the expression 'oral agreement' could be applied to the case of a company ; how much it may constitute a rule of evidence in the case of any individual Any agreement by a company can become effective only when in writing and if the agents of the company, namely, its officers, etc., want to modify an agreement that should also be done by resolutions, writings or clear conduct. How far the concept of an oral agreement could apply to a company being an inanimate person as a conceptual study, cannot readily be answered. Be that as it may, even if such an oral agreement is possible the Tribunal's order does not in my view give a factual finding that such an agreement existed. This point has to be decided afresh on merits.
7. As validly contended by the learned counsel for the department, there is no evidence to show that the rate of interest originally fixed at 13.25 per cent has been altered as a matter of policy or agreement to 11.25 per cent. On the positive side there is no clear alteration or evidence of the same except the alleged entries in the books. Since the entries themselves were not produced, it is not possible to say whether this indicated even the rate of interest adopted in calculating the amount debited or credited. Even if it indicated that, the entry only gives written expression to certain financial transactions which have taken place. They cannot indicate the manner in which the transactions have or should have taken place. In other words, the mere fact of an entry for crediting and debiting interest even indicating the rate of 11.25 per cent would not be evidence of the fact that there was an agreement to credit or debit interest at that rate. It could be only a partial fulfilment of a fuller obligation. For the remaining fulfilment a separate entry could as well be made later on. While the entry could indicate that the interest at 11.25 per cent has been taken credit and debit for in the respective party's accounts, it is not at all evidence of the actual rate of interest one party should charge or has charged the other. When the entries do not have, thus, even a remote relation to the rate of interest agreed upon certainly they cannot be treated as written alteration of a written earlier agreement. If, therefore, a written agreement to be altered requires another written agreement merely making the entries would not be sufficient for the purpose.
8. There is substance in the contention of the learned counsel for the department that if the parties were to go to the Court from the details furnished before us and the evidence available it cannot be concluded that the Court would refrain from awarding interest at 13.25 per cent as stipulated by the agreement. It was pointed out before us by the learned counsel for the assessee that even today no higher interest than 11.25 per cent has been paid to the assessee. The entries together with this conduct establish once for all a modification of the agreement. In my view even this does not support the assessee's case.
If the assessee on the basis of the agreement of September 1973 were to claim interest at a higher rate than credited in the books, in law he could recover the same. Even limitation for recovery cannot be said to have intervened : firstly, because whatever may be the position now, in 1974-75 certainly there was no limitation. Secondly, the parties being members of a closely tied group even if the matter has become time barred the debtor could make payment if he wanted. What is indicated is that even the conduct of the parties as obtaining till now does not indicate a modification of the agreement.
9. There is conflict in the two alternative claims made by the assessee. It was originally suggested that there was a modification of the agreement. It is alternatively suggested that there was an occasion for forgoing. Waiver can arise only when the higher interest has accrued. This natually implies no alteration of agreement either orally or in writing. Be that as it may, there is no evidence in the present case as the above mentioned facts themselves indicate of any forgoing of the interest over and above 11.25 per cent as a matter of fact. In the first place there is nothing to show that the amounts entered in the books are in full and final settlement of the outstanding interest.
Even the entries themselves do not indicate this. Secondly, there is no bar to the assessee claiming the extra interest at any future time. Nor can the doctrine of estoppel with regard to the balance of interest now claimed to be waived or forgone be applied. Even, therefore, with regard to the theory of forgoing interest there is no evidence to support the assessee's claim.
10. No exception can be taken to the claim of the assessee that real income only can be subject-matter of taxation. In the present case the real income of the assessee would be the accrued income since no evidence exists to point out to the contrary. Both before me and before the Tribunal Bench which heard the appeal, several decisions were cited with regard to 'real income', the doctrine of accrual, etc. In view of the facts of the case it is not necessary to go in detail into these decisions. Accepting the taxability of only real income no factual evidence has been produced by the assessee to show that there has been a variation in the terms of the agreement either by an agreement in writing or orally or by conduct or by any other means so as to justify an inference that the amount of interest receivable or received was less than what was stipulated in the agreement. In fact with regard to the loan from Sercon substantial evidence was produced in the form of letters, resolutions, etc., to show a modification of the agreement and an attempt to correct what was regarded as a mistake in the agreement.
Since at the same time according to the assessee the present mistake also existed in the other agreement, it is not known why attempts were not made to correct that mistake also. While not fully accepting the claim of the department that the present claim of the assessee is an after thought, absence of letters, resolutions, etc., in respect of the second agreement as in the case at the first agreement does become fatal to the assessee's claim. I, therefore, hold that the Tribunal's order fixing the taxable interest at 13.25 per cent in respect of loan from Telerad does not require any modification. The matter will now go back to the original Bench for final disposal of the matter.