Law: Economic Reforms Order, 1972

Section: 7B,7C,Second Schedule

Law: Wealth Tax Rules, 1963

Section: 8(2)(c)

(a) Economic Reforms Order (1 of 1972)---As amended by Act (XIV of 1973), Ss. 7 B, 7 C & Second Schedule (to amending Act) Wealth Tax Rules, 1963, r. 8(2) (c)¬Break up value method Determination of total wealth of company by break up value method can be made by adding to balance¬-sheet, paid up capital ; debentures ; reserves and balance as per profit and loss account Before adding reserves, balance sheet of company has to be first carefully scrutinized with view to excluding therefrom items which should really have formed part of reserves¬-No other provision except scrutiny of balance sheet present for taking into consideration any other factor which ordinarily does not fall under any one of items to be added to balance sheet for determination of total wealth of company. (b) Wealth Tax Roles, 1963- R. 8(2)(c) Determination of break up value Shortfall in provisions for depreciation being on fixed assets has nothing to do with determination of break up value. Civil Petition No. 747 of 1982 ORDER M. S. H. QURAISHI, J. This order will dispose of Civil Petition No. 747 of 1982 filed by the Federal Government of Pakistan and two others and Civil Petition No. 756 of 1982 filed by the promoter--shareholders, which both arise from the order dated 15 6 1982 of an I. C. A. Bench of the Lahore High Court. 2. The question that falls for consideration in the first mentioned petition is whether the entire depreciation worked out cumulatively has to be taken into account in computing the "Break Up Value" in the matter of payment of compensation to the shareholders of a taken over establishment. The question arises in the following circumstances. 3. The establishment of the Model Steel Mills Limited was taken over under the Economic Reforms Order, 1972 (P. O. No. 1 of 1972). By an amendment made on 15 9 1973 by Act LXIV of 1973, the Federal Government was empowered under section 7 B to acquire shares of the said company and to pay compensation under section 7 C for the shares so acquired. The method for working out compensation is given in para. 1 of the Second Schedule to the amending Act LXIV of 1973, according to which where the shares of the company were not quoted on…

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