DIPAK KUMAR SEN, J. - (1.) BENGAL Assam Steamship Co. Ltd., the assessee, at the material time used to carry on the business of inland transport service between Calcutta and Assam, via, East Pakistan, which is now Bangla Desh. In its said business, the assessee owned a number of steamers, barges, tugs, launches and boats which were in operation in the said transport service.
(2.) DURING hostilities between India and Pakistan in September, 1965, 18 vessels of the assessee, then in Pakistan, were captured as prize by the Pakistan authorities. The Government of Pakistan thereafter moved the High Court at Dacca in its Admiralty jurisdiction. The Dacca High Court declared the vessels as enemy property and the same were directed to be confiscated by an order dated October 20, 1965. Fourteen of the said eighteen vessels had been insured by the assessee for Rs. 31,10,342 with the Government of India under the Emergency Risks Insurance Scheme promulgated under the Emergency Risks (Factories) Insurance Act, 1962. Under the said insurance, 80 per cent of the loss suffered by the insured was agreed to be indemnified by the insurer.
(3.) BY its letter dated September 17, 1965, the assessee at the first instance claimed a sum of Rs. 24,47,150. Subsequently, the assessee by its letter dated June 21, 1966, enhanced its claim to Rs. 24,95,954. The Government of India, the insurer, accepted the initial claim of the assessee for Rs. 24,47,150 on the following terms and conditions: (a) The Government of India would be entitled to retain the said vessels if the same were received back from the Government of Pakistan. (b) In case the Government of India received the vessels back, the assessee would accept the same back along with the reduced insurance amount which the assessee might, in such circumstances, be entitled to.;