https://www.taxtmi.com/caselaws?id=61941 An appropriation for gratuity is treated as a provision for known or contingent liability unless actuarial valuation shows any excess, in which case only that excess may be regarded as reserve for capital computation under the surtax rules. Statutory transfers to a banking reserve fund, required by law from annual profits, retain their reserve character for chargeable-profit computation even if book entries are made later. Amounts appropriated from earlier profits may be taken as reserve at the opening of the next accounting year, while any gratuity-related amount must again be adjusted on actuarial principles. Interest on sticky advances was left to consequential recomputation in line with the rectified income-tax position. en-us Fri, 27 Dec 1985 00:00:00 +0530 Mon, 17 Jan 2011 12:00:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=61941 An appropriation for gratuity is treated as a provision for known or contingent liability unless actuarial valuation shows any excess, in which case only that excess may be regarded as reserve for capital computation under the surtax rules. Statutory transfers to a banking reserve fund, required by law from annual profits, retain their reserve character for chargeable-profit computation even if book entries are made later. Amounts appropriated from earlier profits may be taken as reserve at the opening of the next accounting year, while any gratuity-related amount must again be adjusted on actuarial principles. Interest on sticky advances was left to consequential recomputation in line with the rectified income-tax position. Case-Laws Income Tax Fri, 27 Dec 1985 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=61941