JUDGMENT
Thanikkachalam, J.
1. Pursuant to the directions given by this Court, in TCP No. 417/79 dt. 14th September, 1980, the Tribunal has referred the following question for our opinion under s. 27(3) of the WT Act (hereinafter referred to as the Act) :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that s. 35 of the WT Act, 1957 cannot be invoked in the assessee’s case for the asst. yr. 1972-73 ?”
2. In the asst. yr. 1972-73, the WTO in his order dt. 31st May, 1975 under s. 35 of the Act, added a sum of Rs. 45,700 as a liability due by the assessee to the Life Insurance Corporation, omitted to be disallowed in the original assessment made on 20th February, 1973 wherein such liability has been allowed as a deduction. According to the WTO, rectification is possible, since the liability in question being secured and (sic-against) the life insurance policies in respect of which no wealth tax was chargeable, had been wrongly allowed and the mistake had been discovered on a perusal of the evidence available on record. The AAC, on appeal, confirmed the order of the WTO, as, according to him, there was a clear mistake of patent omission to add back an obviously disallowed item and as such, there could not be a debate. The aggrieved assessee filed a further second appeal before the Tribunal. The Tribunal was of the view that the interpretation of s. 2(m)(ii) of the Act had been the subject-matter of consideration by the Benches of the Tribunal on several occasion. In ITA No. 523/Mad/75-76, the A Bench by its order dt. 22nd January, 1976 has allowed a similar contention of the Department and, in fact, the question has been referred to the High Court as there was a question of law. Another view was also taken by the Tribunal that the liability will be allowed [vide the decision – Gulanikar’s 2 Acts Gift & Wealth-tax (1976) Edn. pp. 73-74 WTA No. 122/Ahd/70-71 for asst. yr. 1968-69 reported in 1973 Tax (3) 128]. Since two views are possible, as is evident from the above said orders of the Tribunal and the matter invoking a question of law and had been referred to the High Court, the Tribunal was of the view that s. 35 cannot be brought into application. According to the Tribunal, the interpretation of s. 2(m)(ii) involves a long drawn out arguments and, therefore, s. 35 which can be applied to correct mistakes apparent from the record, cannot be invoked. Accordingly, the Tribunal allowed the assessee’s appeal.
3. Learned Standing counsel appearing for the Department submitted that in view of the definite provisions contained in s. 2(m)(ii) and s. 5(1)(vi) of the Act, omission to disallow in the original assessment, the debt owed by the assessee on the life insurance policies, cannot be deducted from the total wealth of the assessee. According to learned standing counsel, when the provisions contained in s. 2(m)(ii) were not followed in the original assessment order, made by the WTO, there occurred a mistake apparent from the record warranting interference under s. 35 of the Act. In order to support this contention, reliance was placed upon a decision in CIT vs. Sundaram Textiles Ltd. (1984) 149 ITR 525 (Mad) : TC 53R.173, wherein this Court, while considering the provisions of s. 154 of the IT Act, 1961 held that the application of a wrong provision of the Act or the erroneous application of the same, to the facts of the case, which do not call for such application, will amount to a mistake apparent from the record for the purpose of s. 154 of the IT Act. In order to come to this conclusion, this Court followed a decision of this Court in J. Manickavasagam Chettiar vs. CIT (1983) 143 ITR 269 (Mad) : TC 53R.472. According to learned standing counsel, all the High Courts took a uniform view that if the entire asset is completely excluded in the computation of the net wealth, the debt in question obtained on the security of the said asset, cannot be deducted in computing the net wealth. Reliance was placed on the decision in CIT vs. Vaidyanathan (1985) 153 ITR 11 (Mad) (FB) : TC 64R. 922 of this Court; T. V. Srinivasan vs. CWT (1980) 123 ITR 464 (Mad) : TC 64R.925, Jiwanlal Virmani vs. CWT (1967) 66 ITR 338 (All) : TC 64R.942, Apoorva Shantilal (HUF) & Ors. vs. CWT (1982) 135 ITR 182 (Guj) : TC 64R.926, CWT vs. Narayandas J. Hemani (1983) 143 ITR 87 (MP) : TC 64R.947, D. Basappa vs. CWT (1986) 160 ITR 826 (Kar) : TC 64R.949 and CWT vs. D. H. Venaina (1992) 193 ITR 488 (Bom) : TC 64R.949. Learned standing counsel also submitted that in view of the decision of Allahabad High Court in Jiwanlal Virmani’s case (supra) wherein it was held that loans raised on security of life insurance policies and utilised for acquiring assets, which are assessable to wealth tax, are not deductible in computing the net wealth. Therefore, it is not possible to argue that there are conflicting views in the orders of the Tribunals, inasmuch as the said conflict was settled by the above said decision of Allahabad High Court more so when there is no decision on that point by the jurisdictional High Court and especially when there is a decision by another High Court that decision will certainly be binding on the Tribunal. It was, therefore, submitted that the Tribunal was not correct in holding that the interpretation of s. 2(m)(ii) involves a long drawn out argument and hence, s. 35 which can be applied to correct a mistake apparent from records cannot be invoked.
4. On the other hand, learned counsel appearing for the assessee, while supporting the order passed by the Tribunal, submitted that on the date when the WTO passed the rectification order, there were conflicting views expressed by the various benches of the Tribunal in the matter of interpreting s. 2(m)(ii) of the Act. Therefore, a debatable question arises in the matter of understanding the provisions contained in s. 2(m)(ii) of the Act. Since it involves a long-drawn out argument, rectification is not possible under s. 35. Learned counsel also relied upon the judgment of the Full Bench of this Court in CIT vs. Vaidyanathan cited supra to show that there are conflicting views in the matter of interpreting s. 2(m)(ii) of the Act. Therefore, it is pleaded that there is no error in the order passed by the Tribunal in holding that there is no ground for rectification under s. 35 of the Act.
5. It remains to be seen that the order under s. 35 of the Act was passed for the inclusion of a sum of Rs. 45,700, as a liability, omitted to be disallowed in the original assessment. The original assessment was completed on 20th February, 1973 where the liability of Rs. 45,700 was allowed as a deduction. It was that liability, which was sought to be withdrawn by the order passed under s. 35 of the Act. According to the WTO, the liability in question has been wrongly allowed and it was a mistake, which had been discovered on a perusal of the records. The WTO was also of the view that it is not a mistake which requires discovery by long drawn process of reasoning or examination of the arguments, on which conceivably there may be two opinions.
6. According to the Tribunal, the interpretation of s. 2(m)(ii) of the Act has been the subject-matter of consideration by various Benches of the Tribunal on several occasions and there are conflicting decisions by the Tribunals. But on the date when the WTO passed the rectification order, there was a judgment by the Allahabad High Court in Jiwanlal Virmani vs. CWT (cited supra), wherein it was held that loans raised on the security of the life insurance policies and utilising for acquiring assets, which are assessable to wealth tax, are not deductible in computing total wealth. Therefore, the difference of opinion expressed by the Tribunal’s various Benches was settled by the aforesaid decision of the High Court, as the decision of a High Court is binding on the Tribunal wherever it is located in the country especially when there is no decision on that subject by the jurisdictional High Court. Hence, it cannot be contended that the conflicting views expressed by the various Benches of the Tribunal would constitute a ground to say that there is a debatable question and the interpretation of that section involved a long drawn out arguments or process of reasoning. Subsequently, there are decisions of the High Courts cited supra uniformly holding that on a proper reading of s. 2(m)(ii) of the Act, the assessee was not eligible for deduction to a debt, which was secured on exempted property. In T. S. Balram, ITO vs. Volkart Bros. (1972) 82 ITR 50 (SC) : TC 53R.165 this (sic-the-supreme) Court held that a mistake apparent on the record must be an obvious and patent mistake and not something, which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. In the present case, inasmuch as in the original assessment, deduction was not made in accordance with the provisions contained in s. 2(m)(ii) of the Act, there was a mistake, which was rectified under s. 35 of the Act subsequently, on the materials available on record and, therefore, inasmuch as the assessment was not made in accordance with the provisions of s. 2(m)(ii) of the Act, there is a mistake apparent from the record warranting interference under s. 35 of the Act. Hence, it cannot be said that there is any (sic-No.) patent mistake and something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. In that view of the matter, we hold that the order passed by the Tribunal is not correct. We, therefore, answer the question referred to us in the negative and in favour of the Department. No costs.