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of <h1>CBDT Instruction Clarifies Market Value of Unquoted Shares: Gratuity Not Deductible as Debt u/r 1D.</h1> Instruction No. 736 issued by the CBDT on August 14, 1974, clarifies the method for determining the market value of unquoted equity shares under Rule 1D of the Wealth-tax Rules. It specifies that contingent liabilities, such as provision for gratuity, should not be treated as liabilities when computing the net wealth of a company. The Supreme Court's ruling in Standard Mills Company Limited vs. C.W.T., Bombay, established that gratuity is a contingent liability and cannot be deducted as a debt. This position remains unaffected by the decision in Metal Box Co. of India Ltd. vs. their Workmen. Assessing officers are instructed to apply this interpretation.
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