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TMI Blog1984 (6) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ained. He, accordingly, computed the value of the share at Rs. 397 and as the company had not declared dividends for the past five years, 75 per cent of Rs. 397 was taken as the market value of each share. This worked out to Rs. 298. 3. The Commissioner (Appeals) held that the liability for payment of customs duty amounting to Rs. 86,04,348 was a determined and known liability. It was not a contingent liability, the deduction of which alone was prohibited under Explanation II(ii)(f) to rule 1D. He upheld the market value of the shares returned by the assessees. The revenue is in appeal. 4. The learned departmental representative submitted that the company had purchased the ship S.S. Sanjeevani from Japan. It came as an ocean-going steamer from Calcutta to Goa carrying Ambassador Cars. Later it was used as an inland steamer. As customs duty was leviable on import of inland transport, the customs authorities asked V.M. Salgaocar Bros. (P.) Ltd. to file a bill of entry. This was opposed by the company on the ground that no duty was leviable on the import of the ship. The assessees' stand was also confirmed by the Judicial Commissioner of Goa. In these circumstances, he urged tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et amount so arrived at shall be divided by the total amount of its paid-up equity share capital as shown in the balance sheet. The resultant amount multiplied by the paid-up value of each equity share shall be the break up value of each unquoted equity share. The market value of each such share shall be 85 per cent of the break up value so determined : Provided that where, in respect of any equity share, no dividend has been paid by such company continuously for not less than three accounting years ending on the valuation date or in a case where the accounting year of that company does not end on the valuation date, for not less than three continuous accounting years ending on a date immediately before the valuation date the market value of such share shall be as indicated in the Table below :--- THE TABLE --------------------------------------------------------------------------------------------------------------------------------------------------- Number of accounting years ending on the valuation date or in a case where the accounting year does not end on the valuation date, the number of accounting years ending on a Market Value date immediately preceding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than arrears of dividends payable in respect of cumulative preference shares. " Following the rules literally, the break-up value is to be determined by deducting the liabilities from the value of the assets as shown in the balance sheet of the company and dividing the result by the number of paid-up shares. The adjustments to the value of assets and liabilities are to be made in accordance with the two Explanations. It would, thus, appear at first sight, that the balance sheet figures are not to be disturbed except to the extent permitted under the Explanations. Assuming that no variations are permitted, we have to take the value of the assets as shown in the balance sheet as reduced by the liabilities. Therefore, the first point to be examined is whether the sum of Rs. 86,04,384 is a contingent liability. A contingent liability is a liability which arises on the happening of an event. In the present case, we have to examine whether the liability is contingent on the completion of assessment for duty by the customs authorities. It is now well settled that a legal liability occurs or arises as stipulated in the particular statute and does not depend upon the completion of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 12 of the Customs Act. It is the assessee's case that S.S. Sanjeevani is an ocean-going steamer. It came from Japan to Calcutta carrying cargo and from Calcutta to Goa carrying Ambassador Cars. There is no customs duty on ocean-going vessels. This is the claim of the assessee. If so, there can be no liability for import duty which is a fact confirmed by the order of the Judicial Commissioner of Goa, Daman and Diu. Hence, if under the Customs Act there is no liability the allowance of the claim by the Income-tax Officer in the original assessment is a mistake apparent from record. The Income-tax Officer is therefore, not debarred from invoking section 154 of the Income-tax Act. The case would have been different if the duty had been levied by the customs authorities and the assessee had disputed the same. In that case one could have said that the matter was under dispute. All along the assessee's claim has been that the ship is exempt from import duty. The duty cannot also be levied having regard to the fact that the customs authorities are not in a position to enforce the assessee to file a 'bill of entry' under section 46 of the Customs Act and levy duty under section 17 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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