https://www.taxtmi.com/caselaws?id=70010 Rule 1A of the Second Schedule to the Companies (Profits) Sur-tax Act, 1964 does not permit automatic reduction of the capital base merely because the provision for taxation is lower than the final assessed liability. The provision must first be shown to be unreasonable; a provision made on a reasonable basis cannot be treated as a reserve simply because later assessment results in a higher tax figure. On the record, there was only a shortfall between assessed tax and the amount provided, without material proving that the provision was inadequately or unreasonably made, so reduction of the capital base was not justified. en-us Thu, 29 Aug 1991 00:00:00 +0530 Wed, 13 Apr 2011 14:10:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=70010 Rule 1A of the Second Schedule to the Companies (Profits) Sur-tax Act, 1964 does not permit automatic reduction of the capital base merely because the provision for taxation is lower than the final assessed liability. The provision must first be shown to be unreasonable; a provision made on a reasonable basis cannot be treated as a reserve simply because later assessment results in a higher tax figure. On the record, there was only a shortfall between assessed tax and the amount provided, without material proving that the provision was inadequately or unreasonably made, so reduction of the capital base was not justified. Case-Laws Income Tax Thu, 29 Aug 1991 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=70010