https://www.taxtmi.com/caselaws?id=103438 Amounts retained or appropriated to meet known liabilities are treated as provisions, not reserves, for statutory capital computation. A debenture redemption reserve set apart for repayment of debentures was held to be a provision because the borrowing creates a known liability, so it is excluded from capital under the relevant surtax computation rules. By the same principle, a gratuity reserve set aside for future but already known gratuity liability is also characterised as a provision rather than a reserve. The governing test is the nature of the amount retained, not its label or whether the liability falls due later. en-us Tue, 29 Jul 1997 00:00:00 +0530 Thu, 12 Aug 2021 15:57:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=103438 Amounts retained or appropriated to meet known liabilities are treated as provisions, not reserves, for statutory capital computation. A debenture redemption reserve set apart for repayment of debentures was held to be a provision because the borrowing creates a known liability, so it is excluded from capital under the relevant surtax computation rules. By the same principle, a gratuity reserve set aside for future but already known gratuity liability is also characterised as a provision rather than a reserve. The governing test is the nature of the amount retained, not its label or whether the liability falls due later. Case-Laws Companies Law Tue, 29 Jul 1997 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=103438