il Appeal No 71 of 1972
From the Judgment and Order dated the 18th December 1964 the Calcutta High Court in Matter No 19961
TA Ramachandran and DN Gupta for the appellant
BB Ahuja and RN Sachthey for respondent
The Judgment of the Court was delivered by KHANNA J
This appeal on certificate is against the judgment of the Calcutta High Court whereby the High Court answered the following question referred to it under section 27 of the Wealth Tax Act in favour of the revenue and against the assessee appellant Whether on the facts and in the circum stances of the case the provision of Rs4919520 made by the assessee for its tax liability less the amount of the last instalment of advance tax constituted a debt owed by the assessee within the meaning of clause m of section 2 of the Wealth Tax Act on the relevant valuation date  The matter relates to the assessment year 1958 59 the relevant valuation date for which was December 31 1957
A sum of Rs4919520 was provided for in the books of the appellant for the dis 3 1546 SCI76 296 charge of its tax liabilities
The appellant claimed the amount as a deduction in the computation of the net wealth
The claim was disallowed by the wealth tax officer the Appellate Assistant Commissioner of Wealth Tax and the Tribunal
On an application filed by the appellant the Tribunal referred the question reproduced above to the High Court
The High Court while answering the question in favour of the revenue and against the assessee appellant relied upon its earlier decision in the case of Assam Oil Co Ltd vs Commissioner of Wealth Tax Central Calcutta1
The decision in the case of Assam Oil Co Ltd relied upon by the High Court was reversed on appeal by this Court
Naturally therefore at the hearing of the appeal Mr Rama chandran learned counsel for the appellant has drawn our attention to that decision of this Court in the case of Assam Oil Co vs Commissioner of Wealth Tax Central Calcut ta2
It was held in that case by majority that the amount set apart by the appellant company in its balance sheet as on December 31 1956 as an estimated provision for meeting its tax liability less the last instalment of the demand of the advance tax was a debt owed by the appellant company on December 31 1956 the relevant valuation date within the meaning of section 2m of the Wealth Tax Act 1957 and was deductible in computing its net wealth as on that date
Following that decision we are of the view that the answer to the question referred by the Tribunal to the High Court should be in the affirmative in favour of the assessee appellant and against the revenue
Mr Ahuja submits that the view taken by the majority in the case of Assam Oil Co Ltd needs reconsideration
This Bench however is bound by that decision
Following that decision we accept the appeal set aside the judgment of the High Court and answer the question referred by the Tribunal in the affirmative in favour of the assessee appellant and against the revenue
The parties in the circumstances shall bear their own costs of this Court as well as of the High Court
PHP Appeal allowed


Summary:
The appellant made a provision for a sum of Rs4919520 in his books of account for the discharge of its tax liabil ities
The appellant claimed deduction of the said amount for computation of his net wealth on the ground that it was a debt owed by the assessee within the meaning of section 2m of the Wealth Tax Act
The claim was disallowed by the Wealth Tax Officer the Appellate Asstt
Commissioner of Wealth Tax and the Tribunal
The High Court of Calcutta answered the reference in favour of the revenue and against the assessee relying on its earlier decision in the ease of Assam Oil Co Ltd Allowing the appeal by certificate HELD This Court has reversed the decision of Calcutta High Court in the case of Assam Oil Co Ltd In that case this Court held by majority that the amount set apart by an assessee in his balance sheet on the valuation date as an estimated provision for meeting its tax liability less the last instalment of the payment of the advance tax was a debt owed by the assessee within the meaning of section 2m of the Wealth Tax Act 1957 and was deductible in computing its net wealth as on that date
The Court followed the said deci sion
296C G Assam Oil Co vs Commissioner of Wealth Tax Central Calcut ta followed