D.N. SHARMA, J.M.: As both these appeals filed by Department are directed against order dt. 16th April, 1986 passed by AAC of WT and give rise common, issues, they were heard together and for sake of convenience, they are disposed of by single order. dispute in these appeals for asst. yrs. 1981-82 and 1982-83 relates to valuation of 830 unquoted equity shares of M/s Otte India Pvt. Ltd. assessee disclosed value of these shares for both assessment years on basis of yield method. M/s Otte India Pvt. Ltd. is going company which has been distributing maximum amount of dividend regularly for years in past. WTO did not accept valuation disclosed by assessee and he valued shares by following break-up value method following principle laid down in r. 10 of WT Rules, 1957. assessee appealed to AAC of WT before whom it was contended that r. 1D is directory and not mandatory and that valuation of unquoted enquiry shares should be determined by following yield method as has been laid down by Supreme Court in case of CWT vs. Mahadeo Jalan & Ors.(1972) CTR (SC) 395: (1972) 86 ITR 621 (SC). Reliance was also placed on decision of Tribunal, Calcutta Bench 'B' dt.2nd May, 1985 in ITA. No. 1067 (Cal/83 in case of Aloke Bharatiya vs. ITO in support of contention that proper method of valuation of unquoted shares is yield method and not break-up value method. AAC of WT accepted contention advanced on behalf of assessee and following decision of Tribunal in case of Aloke Bharatya (supra), directed WTO to recompute value of 830 equity shares of M / s Otte India Pvt. Ltd. for two assessment years by adopting yield method. Aggrieved, Department has come up in second appeal before Tribunal. Shri Achal Singh, ld. Deptl. Representative has submitted before us that r. 1D prescribes method for valuation of unquoted shares and that this rule being mandatory, WTO was justified in determining valuation of shares in this case by following break-up value method. In support of contention that r. 1D is mandatory, reliance has been placed on decision of Special Bench of Tribunal in WTO vs. Seth Sudhir Kumar Modi (1986) 24 TTJ (Del) 289 (SB): (1985) 14 ITD 194 (Del) (SB) and decision of Tribunal, Calcutta Bench 'B' in case of WTO vs. Sheo Prasad Nopani (1986) 1 6 ITD 166 (Cal). ld. Deptl. Representative also relied on certain observation of Calcutta High Court in case of CWT vs. Balbhadradas Bangur (1984) 148 ITR 149 (Cal) in support of submission made by him. It was further submitted that AAC of WT tax was wholly in error in directing WTO to recompute value of shares by following yield method. Shri P.N. Banerjee, ld. authorised representative for assessee had, on other hand, fully supported impugned order of AAC of WT Act. Reliance was placed on decision of Tribunal, Calcutta Bench 'C' in WTA No. 946 and 947 (Cal/82 in case of WTO vs. Smt. Madhukant J. Shah (1986) 17 ITD 947 (Cal) and also on decision of Tribunal, 'A' Bench, Calcutta in WTA Nos. 163 to 166 (Cal) /86 in case of Mr. K.G.R. Nayar in support of contention that r. 1D is directory. It was next submitted by ld. authorised representative for assessee that in instance case, valuation date of assessee and valuation date of M/s Otte India Pvt. Ltd. do not coincide and that in view of decision of Delhi High Court in case of Smt. Sharbati Devi Jhalani vs. CWT reported in (1986) 54 CTR (Del) 85: (1986) 159 ITR 549 (Del), r. 1D must be held to be directory in this case. We have considered rival contention as also facts record. In case of Seth Sudhir Kumar Modi (supra) it has, no doubt been hold by Special Benchof Tribunal that r. 1D is mandatory. Tribunal in that case has noted that Bombay High Court in case of Kusumben D. Mahadevia vs. CWT (1980) 14 CTR (Bom) 20: (1980) 124 ITR 799 (Bom) has held that r. 1D is directory and not mandatory. Special Bench, however felt bound by decision of Allahabad High Court in CWT vs. Sripat Singhania 1977 CTR (All) 119: (1976) 112 ITR 363 (All), CWT vs. Padampat Singhania (1974) 9 CTR (All) 56: (1979) 117 ITR 443 (All) And Bharatia Singhania vs. CWT (1979) 9 CTR (All) 316: (1979) 119 ITR 258 (All) wherein it has been held that r.1D is mandatory. Special Bench noted that there is difference of opinion between High Courts on question whether r. 1D is directory and mandatory, but as Special Bench felt bound to consider matter in light of decisions of Allahabad High Court in view of fact that those decisions were binding upon it, Special Bench hold that r. 1D is mandatory. This decision was followed in case of Sheo Prasad Nopani (supra). In cases of K.G.R. Nayar (supra) and M/s. Madhukant J. Shah (supra) Tribunal has expressed view that r. 1D is directory and not mandatory. Similar issue came up for consideration before Tribunal, Delhi Bench 'D' in K.D. Datwani vs. WTO (1986) 15 ITD 60 (Del). In that case Tribunal followed decision of Delhi High Court in case of Sarbati Devi Jhalani (supra). In that case it has been held by Delhi High Court that where valuation date of company and that of assessee do not coincide then applicability of r. 1D is directory and not mandatory. Following decision of Delhi High Court, Tribunal in case of K.D. Datwani (supra) held that shares are to be valued not by applying provisions of r. 1D unless Balance Sheet date and assessee's valuation date coincide with each other, otherwise share have to be valued on yield method. A. In case of Sarbati Devi Jhalani (supra) Delhi High Court, following decisions of Supreme Court in case of CWT vs. Mahadebdas Jalan (supra) and CGT vs. Kusumben D. Mahadevia (1980) 14 CTR (SC) 366: (1980) 122 ITR 38 (SC), held that correct method of valuing unquoted shares would be method as approved by Supreme Court in these cases which is by applying yield method. break-up method is to be used only if company on valuation date is ripe for winding up. It will thus be seen that as question under consideration there is divergence of judicial opinion. In case of CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177: (1973) 88 ITR 192 (SC) it has been held by Supreme Court that if Court finds that language of taxing provision is ambiguous or capable of more meaning than one, then Court has to adopt that capable of more meaning than one, then Court has to adopt that interpretation which favours assessee. ratio laid down by Supreme Court in that (case can be legitimately applied in present case. In view of difference of judicial opinion on point under consideration, we accept view that r. 1D is directory as this view is favourable to assessee. In case of Balbhadradas Bangur (supra) one of dispute related to valuation of shares of certain investment companies. Rule 1D does not apply t o investment company. assessment years involved were 1961-62 to 1964-65. At page 162 of report it has been observed by their Lordships that in any event, r. 1D. is applicable to shares of companies other than investment company but they were concerned with shares of investment company and, therefore, rule would not be attracted. These observations were pressed into service on behalf of Department in support of view that r. 1D is mandatory. We are unable to accept this contention. above observations made by High Court have to be read in proper context. Their Lordships have observed that so far as r. 1D is concerned, it being subsequent rule would not be applicable. It was, however, urged before their Lordships that as that rule was procedural matter, it would have retrospective effect. It was observed by High Court that it was unable to accept contention that rule was merely procedural matter because valuation of shares affected substantive right of assessee. It was in that context that it was observed that in any event r. 1D will be applicable to shares of companies other than investment company. observations made by High Court in our opinion, do not at all support view that r. 1D is mandatory. On other hand, observations made by their Lordships at page 164 of report do lend support to view that r.1D is directory. Their Lordships considered decision of Allahabad High Court in case of CWT vs. Laxmipat Singhania 1977 CTR (All) 225: (1977) 111 ITR 272 (All) wherein it was held that in determining valuation of unquoted equity shares, r. 1D prescribed break-up value as basis which was well accepted method of valuing unquoted equity shares and that this rule must be regarded as rule of evidence or procedure and not rule of substantive law. It held in that case that rule was applicable to pending assessments. After having considered observations of Allahabad High Court in case of Laxmipat Singhania (supra) their Lordships observed that it appears from judgment that attention of Allahabad High Court was drawn to decision of Supreme Court in case of Mahadev Jalan 1972 CTR (SC) 395: (1972) 86 ITR 621 (SC) which dealt with question of valuation of unquoted shares. Their Lordships then proceeded to make following observations: "Insofar Allahabad High Court, however, held that rule 1D affected valuation of shares, with great respect, we cannot agree with this aspect of matter. In any event, this is academic because Supreme Court in case of Mahadev Jalan 1972 CTR (SC) 395:: (1972) 86 ITR 621, (SC) has laid down principles which were applicable would be applicable in resolving this controversy." From above observations, it is clear that their Lordships of Calcutta High Court did not approve of observations made by Allahabad High Court in case of Laxmipat Singhania (supra) according to which value of unquoted shares should be determined by following break-up value method s prescribed in r. 1D. In this connection, their Lordships have considered decision of Supreme Court in case of Mahadev Jalan (supra) which has dealt with question of valuation of unquoted shares. Supreme Court in that case has held that yield method is generally applicable method while break-up method is one resorted to in exceptional circumstances or where company is ripe for liquidation, for determining valuation of unquoted shares. So aforesaid observations of Calcutta High Court do lend support to view that r. 1D is directory and that valuation of unquoted shares should be determined by following yield method as has been held by Supreme Court in case of Mahadev Jalan (supra) unless there are some exceptional circumstances, such as, company is ripe for liquidation. In instant case, no such exceptional circumstances exists. There is yet another aspect of matter. assessee has filed balance sheet of M/s Otte India Pvt. Ltd. as on 31st Dec., 1980 to show that valuation date of assessee and of said company do not coincide. valuation date of assessee for two assessment years are 31st March, 1981 and 31st March 1982 whereas Balance Sheet dates of aforesaid company for two assessment years would be 31st Feb., 1981 and 31st Dec., 1982 respectively. So, as valuation dates of assessee and that of company in instant case do not coincide, following decision of Delhi High Court in case of Smt. Sarbati Devi Jhalani (supra), we hold that for this added reason also application of r. 1D in instant case is directory. For foregoing reasons, we confirm order of AAC of WT directing WTO to recompute value of 830 unquoted equity shares of M/s Otte India Pvt. Ltd. by following yield method. In result, departmental appeal fails and are hereby dismissed. *** WEALTH-TAX OFFICER v. K.S. RANGANNA