https://www.taxtmi.com/caselaws?id=99845 Under the Companies (Profits) Surtax Act, an amount earmarked as proposed dividend was not includible in capital for statutory deduction purposes because capital under rule 1 of the Second Schedule is computed by reference to reserves as on the first day of the previous year, and the balance-sheet showed only a proposal until adopted by the general body. Once the shareholders acted, the reserve and dividend declaration took effect together, leaving no reserve amount available for capital computation. The court also held that the Explanation to rule 1 excludes amounts of the nature of proposed dividends from reserve treatment. The amount was therefore excluded from capital computation, against the assessee. en-us Tue, 16 Dec 1980 00:00:00 +0530 Mon, 30 Jan 2012 13:08:37 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=99845 Under the Companies (Profits) Surtax Act, an amount earmarked as proposed dividend was not includible in capital for statutory deduction purposes because capital under rule 1 of the Second Schedule is computed by reference to reserves as on the first day of the previous year, and the balance-sheet showed only a proposal until adopted by the general body. Once the shareholders acted, the reserve and dividend declaration took effect together, leaving no reserve amount available for capital computation. The court also held that the Explanation to rule 1 excludes amounts of the nature of proposed dividends from reserve treatment. The amount was therefore excluded from capital computation, against the assessee. Case-Laws Companies Law Tue, 16 Dec 1980 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=99845