https://www.taxtmi.com/caselaws?id=71474 Excess provision for taxation existing on the first day of the previous year was treated as a reserve for capital computation under Rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964. The text applies the principle that a provision for a known liability, to the extent it exceeds what is reasonably necessary, assumes the character of reserve and is not excluded merely because it is later written back. Rule 1A is cited as supporting the same approach, since adjustment for a short or absent provision implies that an excess provision remains part of capital at the opening date. The excess amount was therefore includible in general reserve and in the assessee's capital computation. en-us Fri, 18 Dec 1992 00:00:00 +0530 Mon, 25 Apr 2011 10:48:27 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=71474 Excess provision for taxation existing on the first day of the previous year was treated as a reserve for capital computation under Rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964. The text applies the principle that a provision for a known liability, to the extent it exceeds what is reasonably necessary, assumes the character of reserve and is not excluded merely because it is later written back. Rule 1A is cited as supporting the same approach, since adjustment for a short or absent provision implies that an excess provision remains part of capital at the opening date. The excess amount was therefore includible in general reserve and in the assessee's capital computation. Case-Laws Income Tax Fri, 18 Dec 1992 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=71474