https://www.taxtmi.com/caselaws?id=65078 Rule 1-A of Schedule II to the Companies (Profits) Surtax Act, 1964 permits reduction of capital employed only where no provision is made for a current liability or where the provision is unreasonably short. The Explanation specifically addresses dividend liability, but no parallel deeming rule applies to income-tax liability. On the stated facts, a substantial tax provision had been made in the books, and the later assessed tax did not show an abnormally inadequate provision. The excess of assessed liability over the booked provision could not be mechanically substituted to reduce capital employed, so the proposed reduction was not justified. en-us Tue, 11 Jun 1996 00:00:00 +0530 Sat, 12 Feb 2011 11:57:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=65078 Rule 1-A of Schedule II to the Companies (Profits) Surtax Act, 1964 permits reduction of capital employed only where no provision is made for a current liability or where the provision is unreasonably short. The Explanation specifically addresses dividend liability, but no parallel deeming rule applies to income-tax liability. On the stated facts, a substantial tax provision had been made in the books, and the later assessed tax did not show an abnormally inadequate provision. The excess of assessed liability over the booked provision could not be mechanically substituted to reduce capital employed, so the proposed reduction was not justified. Case-Laws Income Tax Tue, 11 Jun 1996 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=65078