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2012 (8) TMI 603 - DELHI HIGH COURTHow to calculate / determine 'Net Worth' of the bidder for the purpose of tender - Contingent Liability on Revenue Account - writ petition on Contingent Liability to a Revenue Account would only be such sums as would be recorded in the balance-sheet - Held that: - If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. Except contingent liability on account of “Capital Commitments” disclosed by the bidders in their Annual Reports, all other items of contingent liability reported by the bidders in their Annual Reports as per Accounting Standard (AS-29) issued by ICAI were considered for the purpose of net worth sufficiency - Empowered Committee of Secretaries was apprised that there has been no definition in any ICAI standards that contingent liability on revenue account means on account of any amount of demand created by revenue authority such as Income Tax, Sales Tax, etc.- as on calculation of net worth has been supported by audit firm who have concluded that the evaluation of net worth is in accordance with the NIO. Any deviation from the said provisions would result in denial of level playing field to all bidders and could result in litigation, thus it is apparent that the minutes of Notice Inviting Tender meetings have recorded a stand which is against the one projected by the writ petitioner. As these are mere opinions and the final decision has to be taken by the Cabinet Committee on Economic Affairs - Since the Cabinet Committee on Economic Affairs is yet to take a decision we hold the writ petition to be premature.
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