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TMI Blog1980 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... up value of these shares at Rs. 1,611 per share on the basis of the balance-sheet of the company as at 31st December, 1960. The material valuation date was 8th November, 1961, the relevant assessment year in question being 1962-63. The break-up value was arrived at by taking the total of the paid up capital, reserves and surplus and dividing it by 3,471 which was the number of the equity shares of the company. In appeal before the AAC, two contentions were raised on behalf of the assessee. It was contended that while determining the break-up value of the shares of the company, a deduction should have been given on account of additional super-tax which would be payable by the company as a result of non-declaration of dividend and a further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounts should be deducted in computing the break-up value of the shares of the company for the purposes of the wealth-tax assessment of the assessee for the assessment year, 1962-63 ?" Mr. Pandit, appearing on behalf of the assessee, has fairly drawn our attention to the decision of this court in CWT v. S. K. Varma [1978] 113 ITR 882, in which this court has taken the view that in the wealth-tax assessment of an assessee who holds shares in a company, the WTO adopting the break-up method would be justified in considering that the provision for additional super-tax under s. 104 of the I.T. Act, 1961, made by the company was not allowable as a deduction where the order determining the liability of the company to super-tax had not been m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees. The agreement was dated 29th April, 1957. There was, therefore, no dispute that bonus was payable to the employees in accordance with this agreement. The amount which was required to be paid as bonus in accordance with this agreement was, therefore, clearly liability in respect of which deduction should have been made for the purposes of determination of the break-up value notwithstanding the fact that such a provision was not made in the balance-sheet. The auditors had made a note with regard to this omission and, in any case, the liability having accrued to the company, the said amount was clearly liable to be excluded. In this view of the matter, the question referred to us is answered as follows: (a) The provision in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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