https://www.taxtmi.com/caselaws?id=70021 Under the Second Schedule to the Companies (Profits) Surtax Act, excess depreciation could be adjusted only against general reserve, not reallocated to provision for taxation, proposed dividends or profit and loss surplus. A shortfall in taxation provision had to be tested under Rule 1A on a reasonableness basis, so automatic reduction of capital base by the excess tax liability was unsustainable, though the revisional order was within limitation. Investment allowance reserve, being specifically covered by Rule 1(ii), could not be reduced under Rule 1(iii). The common adjustment to general reserve was upheld, the taxation-provision reduction was interfered with, and the reduction for investment allowance reserve was deleted. en-us Thu, 26 Mar 1992 00:00:00 +0530 Wed, 13 Apr 2011 14:51:42 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=70021 Under the Second Schedule to the Companies (Profits) Surtax Act, excess depreciation could be adjusted only against general reserve, not reallocated to provision for taxation, proposed dividends or profit and loss surplus. A shortfall in taxation provision had to be tested under Rule 1A on a reasonableness basis, so automatic reduction of capital base by the excess tax liability was unsustainable, though the revisional order was within limitation. Investment allowance reserve, being specifically covered by Rule 1(ii), could not be reduced under Rule 1(iii). The common adjustment to general reserve was upheld, the taxation-provision reduction was interfered with, and the reduction for investment allowance reserve was deleted. Case-Laws Income Tax Thu, 26 Mar 1992 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=70021