https://www.taxtmi.com/caselaws?id=7393 Undistributed profits carried forward in a profit and loss account do not constitute reserves unless they are specifically appropriated or earmarked for a reserve purpose. The proviso to Section 23A(1) of the Income-tax Act, 1922 applied only where reserves representing accumulations of past profits exceeded paid-up capital. On the accepted figures, the company's reserve balances did not cross that threshold, and the profit and loss account balance remained unappropriated profit rather than reserve. The proviso was therefore not attracted, and the reference was answered in favour of the assessee and against the Revenue. en-us Fri, 15 Nov 1968 00:00:00 +0530 Thu, 19 Feb 2009 11:19:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7393 Undistributed profits carried forward in a profit and loss account do not constitute reserves unless they are specifically appropriated or earmarked for a reserve purpose. The proviso to Section 23A(1) of the Income-tax Act, 1922 applied only where reserves representing accumulations of past profits exceeded paid-up capital. On the accepted figures, the company's reserve balances did not cross that threshold, and the profit and loss account balance remained unappropriated profit rather than reserve. The proviso was therefore not attracted, and the reference was answered in favour of the assessee and against the Revenue. Case-Laws Income Tax Fri, 15 Nov 1968 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7393