Judgment :- R. JAYASIMHA BABU, J. As to whether tax liability which had been assessed under an order of assessment, but, which has been set aside in appeal was not to be regarded as a liability which could be deducted for the purpose of determining the break-up value of the shares of the company in terms of r. 1-D of the WT Rules, is the question that has been referred to us, at the instance of the Revenue. 2. The assessee is a shareholder in Southern Roadways Ltd. and that company had assessed to tax in a sum of Rs. 48, 15, 668. The company's claim that it was not liable under ss. 41(2) and 45 of the IT Act, was rejected by the assessing authority. The claim had been rejected under those provisions by the ITO on the ground that account of the compensation received by the company for loss of route permit was assessable to tax. Those route permits were lost to the company by reason of the takeover by the Government of Tamilnadu w.e.f. 17th January, 1972, of the routes on which the company was running buses. The takeover was effected under the Tamilnadu Fleet Operators Stage Carriages (Acquisition) Act, 1971. 3. The assessee questioned the order of the ITO disallowing the depreciation and charging terminal profits under s. 41(2) and capital gains under s. 45 of the IT Act, 1961, arising out of the compensation received for loss of route permits, after paying the tax that was demanded. In appeal, the assessee succeeded, as a result of which the amount paid by the company was refunded to it on 30th August, 1977. That amount was kept by the company in a term deposit with the State Bank of India. In the balance sheet of the company, the amount of the term deposit was taken as part of its assets. Under the heading liabilities after setting out the provisions for taxation this amount was again shown as "Contingency-per centre". The Revenue being aggrieved by the decision of the AAC, preferred an appeal to the Tribunal. The Tribunal accepted the appeal and set aside the order of the AAC. Consequently, the assessee became liable to repay the amount which was deposited as term deposit. That judgment of the Tribunal was rendered after the closure of the asst. yr. 1980-81. In the order of the Tribunal for the asst. The Tribunal accepted the appeal and set aside the order of the AAC. Consequently, the assessee became liable to repay the amount which was deposited as term deposit. That judgment of the Tribunal was rendered after the closure of the asst. yr. 1980-81. In the order of the Tribunal for the asst. yrs. 1978-79 to 1980-81 under the WT Act, copy of which was placed before us and the contents which are not disputed before us, it is stated that after the order of the Tribunal upholding the levy under s. 41(2) and s. 45 of the Act, the amount has been paid by the assessee. 4. The order of the Tribunal upholding the assessment to tax under ss. 41(2) and 45 of the Act, it is submitted by the counsel at the Bar, has been upheld by this Court in TC No. 635 of 1983 decided on 10th November, 1997, [reported as Southern Roadways Ltd. vs. CIT 1998 (146) CTR(Mad) 550]. 5. The reference before us arises out of the assessment of the respondent to wealth-tax for the year 1980-81 and the question is as to whether the tax liability of Rs. 48, 15, 668 is to be deducted from the total assets for the purpose of determining the break-up value of shares of Southern Roadways (P) Ltd. under r. 1-D of the WT Rules, 1957. The ITO and the Asstt. CIT held that the amount is not deductible as in their view, the balance sheet only disclosed that this amount had been provided as a contingency and as on the valuation date, there was no liability outstanding in that sum, by reason of the fact that the AAC had set aside the assessment that had been made by the ITO on the company, and the Tribunal had not decided the Revenue's appeal on the valuation date. 6. On further appeal by the assessee, the Tribunal has set aside the orders of the AAC and the ITO so far as the deductibility of the sum is concerned for the purpose of determining the break-up value of the shares of the company. The correctness of that view is called in question by the Revenue in this reference. 7. 6. On further appeal by the assessee, the Tribunal has set aside the orders of the AAC and the ITO so far as the deductibility of the sum is concerned for the purpose of determining the break-up value of the shares of the company. The correctness of that view is called in question by the Revenue in this reference. 7. Learned counsel for the Revenue submitted that contingent liabilities cannot be deducted for the purpose of determining the break-up value of the shares under r. 1D of the WT Rules, that as on the valuation date there was no liability on the company for payment of the sum as the ITO's order had been set aside by the AAC and though the Revenue had filed an appeal to the Tribunal that the Tribunal had not decided the case as on that date. Counsel submitted that what is material is only the state of affairs that existed as on the valuation date and any subsequent event was not required to be taken note of for the purpose of deciding the question of the deductibility or otherwise of any sum for determining the break-up value of the shares. Counsel placed reliance on the decision of the Calcutta High Court in the case of CWT vs. Mohan Lal Nopany which was rendered by that Court on 22nd September, 1969. The Court therein held that the break-up value of the shares to a considerable extent was dependent upon the value which potential buyer of the shares would place on the company's shares having regard to the financial date disclosed in the balance sheet and such a potential buyer was not likely to value the shares at a lesser figure only because an appeal was pending before the statutory authorities under the Agrl. IT Act in which the correctness or otherwise of an assessment order made against the company was an issue. This judgment does not refer to r. 1D. As indeed it could not have as that rule was introduced only in the year 1967. The Calcutta High Court was concerned in the reference arising out of assessment to wealth-tax for the asst. yrs. 1959-60 which years was several year prior to the introduction of r. 1D of the WT Rules. That decision was rendered prior to the decision of the apex Court in the case of Kedarnath Jute Mfg. Co. The Calcutta High Court was concerned in the reference arising out of assessment to wealth-tax for the asst. yrs. 1959-60 which years was several year prior to the introduction of r. 1D of the WT Rules. That decision was rendered prior to the decision of the apex Court in the case of Kedarnath Jute Mfg. Co. Ltd. vs. CIT and the decision of the apex Court in the case of CWT vs. K. S. N. Bhatt. 8. The decision relied upon by the learned counsel for Revenue is, therefore, of no assistance for the purpose of deciding the case which has to be decided in the light of r. 1D of the Rules and the decision of the apex Court rendered subsequent to the decision of the Calcutta High Court. To the extent the judgment of the Calcutta High Court is at variance with what has laid down by the apex Court in the two decisions referred to earlier, the judgment of the High Court of Calcutta must be held to have been overruled and it can no longer be regarded as good law. 9. The point at issue is not res integra and is covered by the authoritative decision of the apex Court referred to earlier in the case of Kedarnath Jute Mfg. Co. Ltd. vs. CIT (supra), that was a case under the IT Act. The Court held that the liability of the assessee under the ST Act did not cease to be a liability because the assessee had taken proceedings before higher authorities for getting it reduced or wiped out so long as the contention of the assessee did not prevail. It was also held that the fact that the assessee had failed to debit the liability in its books of account did not debar it from claiming the sum as a deduction either under s. 10(1) or under s. 10(2)(xv). The Court has also observed that whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights. 10. In the case of CWT vs. K. S. N. Bhatt (supra), arose under the WT Act. The Court has also observed that whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights. 10. In the case of CWT vs. K. S. N. Bhatt (supra), arose under the WT Act. The question considered by the Court in that case was whether the liabilities claimed by the assessee, though existence of the very liability was questioned by the assessee, should be allowed as a 'debt owed' in computing the net wealth of the company. The Court after considering that question held as under, "Now, the quantification of the income-tax, wealth-tax or gift-tax liability is determined by a corresponding assessment order, and even if the assessment order is made after the valuation date relevant to the wealth-tax assessment in which the claim to deduction is made, there is a debt owed by the assessee on the valuation date. The quantification effected by an assessment order may be varied as the income tax, wealth tax and gift-tax case is carried in appeal to the AAC or thereafter to the Tribunal, and indeed even in reference later to the High Court or subsequent appeal to this Court. It is the quantification of the tax liability by the ultimate judicial authority which will determine the amount of the debt owed by the assessee on the valuation date. So long as such ultimate determination indicates the existence of a positive tax liability, it must be held that there is a debt owed by the assessee on the valuation date even though such determination may be subsequent in point of time to the valuation date. If, however, it is found on such ultimate determination that there is no tax liability, it cannot be said that merely because originally a tax liability had been determined and stood existing on the valuation date there was a debt owed by the assessee." 11. It is not in dispute that the company had been assessed to tax in the sum of Rs. 48, 15, 668. That amount had been quantified by the AO. The Tribunal had upheld the assessment and that decision of the Tribunal has been affirmed by this Court. The decision of the Tribunal relates back to the valuation date as does the decision of the High Court on the reference. 48, 15, 668. That amount had been quantified by the AO. The Tribunal had upheld the assessment and that decision of the Tribunal has been affirmed by this Court. The decision of the Tribunal relates back to the valuation date as does the decision of the High Court on the reference. It is only if and when the Supreme Court reverses the decision of this Court on the assessee's appeal that the assessee can be said to have no liability for the payment of the sum of Rs.48, 15, 668. As things stand now that sum is a liability which the company has incurred and that sum is required to be deducted from its total asset for the purpose of determining the value of the shares. 12. We make it clear that, if the apex Court were to reverse the decision of this Court in TC No. 635 of 1983 the assessee will not be entitled to deduction of that sum from the total assets of the company for the purpose of determining the break-up value of the share under r. 1D of the WT Rules. 13. We do not find any error in the decision of the Tribunal and the question is answered in favour of the assessee and against the Revenue. The assessee shall be entitled to costs in the sum of Rs.1, 000.