JUDGMENT K. P. Radhakrishna Menon, J. 1. The Revenue is before us. The questions referred for our opinion read:- "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is the owner of the assets of Sree Muruga Tile Works, Pudukkad and not the partnership firm?" 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in allowing depreciation in respect of the assets of Sree Muruga Tile Works, Pudukkad in the hands of the assessee as claimed by him for the two assessment years 1975-76 and 1976-77?". 2. Facts relevant for the disposal of the case can briefly be stated thus: The years of assessment are 1975-76 and 1976-77. Till the accounting year relevant to the assessment year 1972-73, the assessee was the proprietor of the business Sree Muruga Tile Works, Chittur. While so the assessee took his son in the business as a partner. Thus from the assessment year 1973-74 onwards the business was run by the firm. This is evidenced by the partnership deed dated 17th May 1972. In the partnership deed there is a clause specifying that the assets of the business of the tile factory would continue to be the exclusive property of the assessee and the other partner will have no manner of right over the same. Nonetheless in the books of accounts of the partnership based on which the Balance Sheet has been prepared, all the assets and liabilities of the assessee in the business as the proprietor were treated as assets and liabilities of the firm. Not only that, the assessee had been given full credit for Rs. 1,52,560 in his capital accounts which was a figure brought forward from the books of the business carried as proprietary concern. These assets consisted of buildings, machineries, press, etc., which had been taken over by the firm at book value from the proprietary concern. 3. Not only that, the assessee had been given full credit for Rs. 1,52,560 in his capital accounts which was a figure brought forward from the books of the business carried as proprietary concern. These assets consisted of buildings, machineries, press, etc., which had been taken over by the firm at book value from the proprietary concern. 3. That the Tribunal had rejected the case of the assessee, that though these assets had been shown in the books of account of the firm as the assets of the firm, they must be deemed to be the exclusive property of the assessee by virtue of the aforesaid clause in the partnership agreement, while confirming the orders of assessment for the assessment years 1973-74 and 1974-75, is beyond, dispute. This aspect of the case, this court, however refused to consider when the following question arising from the order of the Tribunal was considered and disposed of, on the ground that no specific question in that regard had been raised by the assessee. "Whether on the facts and circumstances of the case the Appellate Tribunal was justified in holding that the assessee is not entitled to depreciation in respect of the assets shown in the books of account of the partnership as assets of the partnership?". A reference in this connection to the judgment in I.T.R. Nos. 3 and 4 of 1979 is profitable. It could be seen from this judgment that the Tribunal in fact had found that the assets in dispute Had been treated as assets of the partnership although clause (2) of the partnership agreement had provided that these assets would continue to be the exclusive properties of the assessee. We shall in this connection extract the following observation from the judgment: "The Appellate Tribunal before whom the Department took up the matter in appeal took a different view. It found that though the partnership deed stated that the assessee would be the owner of these assets, for the purpose of accounting the firm had been treated as the owner in the books.� There was no inconsistency between the provisions of clause (2) of the Partnership deed and the entries in the books of accounts. It found that though the partnership deed stated that the assessee would be the owner of these assets, for the purpose of accounting the firm had been treated as the owner in the books.� There was no inconsistency between the provisions of clause (2) of the Partnership deed and the entries in the books of accounts. In this view it held thus: 'So, the firm, and not the assessee, is the owner of the assets and entitled to depreciation'." Nonetheless this court refused to go into the correctness of the above finding as the question referred did not concern the said finding. Relevant part of the judgment concerning this reads: "The question referred to us does not concern the finding that the firm and not the assessee is the owner of the assets. It concerns only the question whether the assessee is entitled to depreciation on the facts and circumstances of the case. The answer to that is simple. The Appellate Tribunal was justified in holding that the assessee was not entitled to depreciation in view of its finding that the assessee was not the owner of the assets. Whether the finding of the Tribunal that the assessee was not the owner of the assets was right or not is not the subject of any question referred to us. Perhaps it could be said that had it been a question it would have to be answered, for, it was not purely a question of fact but a question of law the answer to which depended on the inference from the facts found. There is no occasion to consider that question now because despite a positive finding by the Tribunal that the assets were of the firm and not of the assessee and a further finding that in that view depreciation cannot be allowed the question referred is only whether depreciation should be allowed. (See Md. Saliha v. I. T. Commr. Kerala, 1973 Taxation Law Reports 775.) Therefore so long as there is no challenge to the basic finding the answer can be only against the assessee. Hence we answer the question in the affirmative, that is, in favour of the Department and against the assessee." 4. (See Md. Saliha v. I. T. Commr. Kerala, 1973 Taxation Law Reports 775.) Therefore so long as there is no challenge to the basic finding the answer can be only against the assessee. Hence we answer the question in the affirmative, that is, in favour of the Department and against the assessee." 4. It is in this backdrop the dispute namely, whether the properties in dispute could be treated as the assets of the firm, notwithstanding Clause.2 of the deed of partnership namely "the present assets of the business will continue to be the exclusive property of No. 1 among us (that is the assessee) and No. 2 (that is his son the other partner) will have no manner of rights over the same by virtue of his becoming a partner in the business" requires to be considered. 5. The learned counsel for the Revenue Sri P. K. R. Menon argues that the finding namely. ........, "So, the firm, and not the assessee, is the owner of the assets and entitled to depreciation" discernible from the order of the Tribunal, confirming the orders of assessment for the assessment years 1973-74 and 1974-75 precludes the assessee from raking up the case covered by the finding, namely the properties belong to him exclusively and as such entitled to claim depreciation during the assessment years in question. Why it is said so, the counsel argues, is that the said finding has nothing to do with the fluctuations in the income. This finding was given while dealing with the question which does not vary with the income every year but depends on the nature of the property; eg., whether a certain property is trust property or not, that has nothing to do with the fluctuations in income. Whatever that be, the evidence afforded by the said finding stands uncontroverted and as such the same must be held to conclude the issue" 6. The counsel for the assessee in answer contends that the doctrine of res judicata or estoppel by record does not apply to the decisions of the assessing authority as the assessing authority is not a Court. A finding or decision of the said authority in one year can be departed from in a subsequent year. The counsel for the assessee in answer contends that the doctrine of res judicata or estoppel by record does not apply to the decisions of the assessing authority as the assessing authority is not a Court. A finding or decision of the said authority in one year can be departed from in a subsequent year. If that be the position in law, the question whether or not the finding of the Tribunal is challenged by getting a question in that regard referred to tin's court, will not operate as res judicata or estoppel by record will not arise at all. It is all the more so because the finding of the Tribunal that the properties in dispute belong to the assessee is based on the judgment of this court in I.T.R. Nos. 36 and 37 of 1975 where an identical question, this court had occasion to consider. On going through the judgment, it could be seen, the counsel argues, that construing a similar clause as Clause.2 in the partnership deed the Division Bench held that the properties continued to be the properties of the proprietor who got the business converted into a partnership as in this case. The counsel further submits that there is no scope to go into the correctness or otherwise of the said finding For this reason, the above argument of the Revenue is liable to be rejected, the counsel submits. 7. It is now settled law that the decisions on question, of Income Tax and rating assessments constitute an important exception to the general rules as to res judicata and as such decisions given in regard to one year's tax or rates do not give rise to estoppels binding the parties in respect of another year's tax or rates. It is so, because, such decisions by the Income Tax Authorities (within the meaning of S.116 of the Income Tax Act) are made at an administrative level; in that they are not made by a court or a Tribunal in a lis between two parties. Yet another reason that should be born in mind in this context is that the question of the liability of the tax payer for the subsequent year's tax or rate is not to be regarded as the same question as that of his liability for the first. Yet another reason that should be born in mind in this context is that the question of the liability of the tax payer for the subsequent year's tax or rate is not to be regarded as the same question as that of his liability for the first. Taxation and rating assessments are decisions 'sui generis' to which the principles ordinarily governing judgments interparties are not applicable. It therefore follows that the doctrine of res judicata or estoppel by record does not apply to the decisions of the Income Tax authorities since they are not courts; that means, a finding or a decision of an Income Tax authority in one year can be departed from in a subsequent year. In otherwords the decisions of the Income Tax authorities cannot be attributed that finality which is needed to set up the estoppel per rem judicatam that arises in certain contexts from legal judgments by courts of competent jurisdiction(See Page 260-261-Spencer-Bower and Turner on 'Res judicata'). In the same strain the apex court also has spoken. [See Amalgamated Coalfields v. Janapada Sabha (A.I.R. 1964 SC 1013 ) and Denial v. Sales Tax Officer ( AIR 1965 SC 1150 )]. 8. The counsel for the Revenue however, argued that judgments of the High Courts on reference determining issues of a fundamental nature (as illustrated in the opening arguments he submits) would operate as res judicata. In support of this argument the counsel cited the following rulings: Sankaralinga Nadar v. C.I.T. ( 41 T.C. 226) Hoystead v. Commissioner of Taxation (1926 A.C. 155) and C.I.T. v. Sri Agasiyar Trust (140 I.T.R. 609). The counsel for the assessee on the other hand contended that such decisions will not operate as res judicata in the proceedings for assessment in subsequent years because they are made in the exercise of advisory jurisdiction. The counsel in this connection pressed into service two decisions; one of the Allahabad High Court in British Indian Corporations. C.I.T. (60 I.T.R. 793) and the other of the Supreme Court in Kamani Properties Ltd. v. C.IT., West Bengal (82 ITR 547). The question thus arising for consideration is: whether the decision of the High Court on reference would operate as res judicata barring the raking up of the issue determined by that decision, in subsequent proceedings. 9. Before we try to get an answer, it is necessary to state the law covering the subject first. The question thus arising for consideration is: whether the decision of the High Court on reference would operate as res judicata barring the raking up of the issue determined by that decision, in subsequent proceedings. 9. Before we try to get an answer, it is necessary to state the law covering the subject first. To say that a judicial decision would operate as res judicata it should be established that it emanated from a judicial tribunal discharging judicial functions. It is vital therefore for the present enquiry ' to define both the expressions 'judicial tribunal' and 'judicial decision'. What is a judicial tribunal? It is well established that a court of record is a judicial tribunal for the purpose of the. doctrine of estoppel per rem judicatam. By now it is equally well established that not only a court of record but all tribunals properly described as a person or body of persons, exercising judicial functions under statute, common law etc. or otherwise in accordance with law are judicial tribunals. It is not as if that the decisions rendered by such judicial tribunals are all judicial decisions. We therefore have to find out what a judicial decision is. To name a decision a judicial decision, two things must be established; and they are: (1) the Judex i.e. the judge or the judicial tribunal should have decided some question of law or fact and (2) such decisions are rendered in the course of resolving a true lis inter parties. We must therefore have both a judex/judge/judicial tribunal and a judicium or judgment/decision, rendered in a lis interparties deciding or determining some question of law or fact for purposes of establishing res judicata. (See Spencer Bower and Turner on Res judicata Second Edition, Chapter II.) The High Court, admittedly is a court of record. In a proceeding before the High Court under S.256 there exists a lis between the assessee on the one side and the Revenue on the other and the High Court dealing with the question of law is a court having power and authority of law to decide the issues. That is not the case with the proceedings for assessment before the Income Tax authorities. In the proceedings before the said authorities there is no lis. That is not the case with the proceedings for assessment before the Income Tax authorities. In the proceedings before the said authorities there is no lis. The decision in the proceeding under S.256 would operate as res judicata, provided the said decision pertains to matters which are of a fundamental nature, for example where the question relating to assessment docs not vary with the income every year but depends on the nature of the property or any other question on which the rights of parties to be taxed are based, for instance whether or not the property belongs to the assessee and which has nothing to do with the fluctuations of income. It shall not however be understood that we are of the view that S.11 C. P.C. would govern the said proceedings. Whether or not S.11 C.P.C. applies, we are of the view that the plea of res judicata on general principles can successfully be taken in respect of such judgments because such judgments are delivered in exercise of special jurisdiction conferred on the High Court by the Income Tax Act. We are fortified in this view by a decision of the Supreme Court in Smt. Raj Lakshmi Dasi v. Banamali Sen ( AIR 1953 SC. 33 ). In this case the question that arose for consideration was whether the decision by the Land Acquisition Court would operate as res judicata against the contention of the respondents about their title to the four anna share of Raj Ballav's estate agitated in a later suit. The Supreme Court, after considering the various aspects of the matter, held that it operates as res judicata. Yet another question that fell for consideration was: could the decision of the Land Acquisition Court be said to be a decision in a suit rendered by a court of competent jurisdiction and therefore could it be said that it operates as res judicata. The Supreme Court after considering the various aspects of these questions observed thus. ''...... the test of res judicata is the identity of title in the two litigations and not the identity of the actual property involved in the two cases..... the condition regarding the competency of the former Court to try the subsequent suit is one of the limitations engrafted on the general rule of res judicata by S.11 of the Code and has application to suits alone. the condition regarding the competency of the former Court to try the subsequent suit is one of the limitations engrafted on the general rule of res judicata by S.11 of the Code and has application to suits alone. When a plea of res judicata is founded on general principles of law, all that is necessary to establish is that the Court that heard and decided the former case was a court of competent jurisdiction. It does not seem necessary in such cases to further prove that it has jurisdiction to hear the latter suit. A plea of res judicata on general principles can be successfully taken in respect of judgments of courts of exclusive jurisdiction, like revenue courts, land acquisition courts, administration courts, etc. These courts are not entitled to try a regular suit and they only exercise special jurisdiction conferred on them by the statute." Referring to this decision the Supreme Court in a later decision in Daryao v. State of U.P. ( AIR 1961 SC 1457 ) observed: "...... the principle underlying res judicata is applicable in respect of a question which has been raised and decided after full contest, even though the first tribunal which decided the matter may have no jurisdiction to try the subsequent suit and even though the subject matter of the dispute was not exactly the same in the two proceedings." And therefore to conclude, we are of the view that the plea of res judicata on general principles, can be taken in respect of judgments, the High Court will render in a proceeding under S.256 provided the decision pertains to an issue of fundamental nature. We therefore, with respect, cannot agree with the view expressed by the Allahabad High Court to the contra. The decisions of the Privy Council in Hoystead, the Full Bench of the Madras High Court and the Delhi High Court support the view expressed by us. 10. Now coming to the decision of the Supreme Court in Kamani Properties (82 ITR 547). We are of the view that the general observations made by the Supreme Court "generally speaking, the rule of res judicata does not apply to taxation proceedings" docs not cover the matters discussed above. This observation is consistent with the law discussed in para 7 supra. This decision therefore has no application here. 11. We are of the view that the general observations made by the Supreme Court "generally speaking, the rule of res judicata does not apply to taxation proceedings" docs not cover the matters discussed above. This observation is consistent with the law discussed in para 7 supra. This decision therefore has no application here. 11. Having understood the position thus, let us see whether the rule of constructive res judicata can be taken in respect of such judgments. The answer, in our view, is in the affirmative because this rule is also introduced on considerations of public policy and principles of the finality of judgments which are important constituents of the rule of law and they cannot be allowed to be violated just because the proceedings cannot be said to partake the characteristics of a suit. In otherwords the rule of constructive res judicata, though in a sense somewhat technical or artificial rule, can be taken in respect of judgments in proceedings under S.256 because the judgment is rendered by a court of exclusive jurisdiction. [vide Raj Lakshmi Dasi's case ( AIR 1953 SC 33 )] Not only that, the High Court which renders the judgment is a court of record. However, this rule will not apply to cases where the party against whom this rule is sought to be applied had no need to challenge the findings, the Tribunal enters in the order disposing of the appeal and which can be put against him in later proceedings, on account of the fact that the ultimate verdict in the appeal was in his favour. Applying this principle to the facts of the case we are of the view that inasmuch as the assessee failed to challenge the finding (which he ought to have challenged) by getting an appropriate question referred to this court for opinion; namely, whether the finding that the properties in dispute belonged to the firm, entered by the Tribunal while disposing of the appeals relating to the years of assessment 1973-74 and 1974-75, the said finding must be held to operate as constructive res judicata barring the assessee from raking up the said dispute in proceedings for assessment for subsequent years. 12. Viewed from another angle: the said findings in any case provide good and cogent evidence when the same question falls to be determined in another year although they arc not binding and conclusive. 12. Viewed from another angle: the said findings in any case provide good and cogent evidence when the same question falls to be determined in another year although they arc not binding and conclusive. However, in order to say that the said findings by themselves do not clinch the issue, the assessee shall establish with other materials that the properties in dispute in fact belong to him exclusively and as such cannot be treated as the assets of the firm. It is all the more so because the balance sheet which provides the basis for the above findings, does reflect the true state of affairs as regards the assets owned by the firm. It should in this connection be remembered that the main object of a balance sheet is to reflect the true financial condition of the undertaking, and it is necessary, therefore, to see that all assets and liabilities are brought in at their proper values, that all the items are properly classified and shown under correct headings, and that no material fact is suppressed or is represented in a manner as would create a misconception as to the true financial condition of the concern in question, (vide Advance Accounting by Batliboi). On going through the records it can be seen that the assessee has not produced any additional materials which would go to show that the finding aforesaid, based on the balance sheet, is not sustainable. In other words there is nothing on record to show that after the formation of the partnership the properties in dispute were treated as the exclusive property of the assessee in contradistinction to the claim of the firm in regard thereto and upheld by the Appellate Tribunal while dealing with that question in the appeal arising from the order of assessment for the years of assessment 1973-74 and 1974-75. Considered in this background the argument of the counsel for the assessee based on the following excerpt from Lindley on partnership namely: "In such circumstances, for the purpose of calculating capital allowances, the machinery or plant is treated as partnership property, but, of course, the allowances while they may be claimed by the partnership will only benefit those partners who incurred the expenditure." is liable to be rejected. Even otherwise the above argument cannot be accepted because the principle mentioned above cannot be applied to the assessment proceedings under the Income Tax Act because under the Income Tax Act, unlike the English Income Tax Act, 1952, the firm is an assessee. The business income of a firm is assessed in the same manner in which the business income of any other person is assessed and to enable the assessment it is necessary that the firm also shall submit a return, the contents thereof shall find a place in the balance sheet and profit and loss account. We therefore are of the view that the above argument is not sustainable in law. 13. The counsel for the assessee then contended that the finding that is under challenge is based on the judgment of this court in I.T.R. 36 and 37 of 1975 and therefore there is little scope to interfere with the said findings. This judgment cannot be said to lay down any principle so as to say that the same is binding as a precedent. The judgment therefore shall confine to the facts of the case. A reference in this connection to the following excerpt from the judgment is profitable; "..... We have read Clause.13 of the Partnership deed, and we are of the opinion that the said clause supports the conclusions arrived at by the tribunal." The learned Judges have also observed that the question involved was essentially a question of fact. This argument also therefore cannot be taken cognisance of. 14. In the light of the discussion above the first question is answered in the negative and in favour of the Department. In the light of the answer to the first question, it is unnecessary to answer the second question and therefore we decline to answer the said question. A copy of this judgment under the signature of the Registrar and the seal of this Court shall be forwarded to the Income Tax Appellate Tribunal, Cochin Bench.