https://www.taxtmi.com/caselaws?id=8995 A statutory reserve is deductible only where the governing law creates an overriding diversion of revenue so that the amount never forms part of the assessee's real profits. On that principle, the contingencies reserve under the Electricity (Supply) Act was treated as deductible because it was restricted by statute, had to be invested in authorised securities, and was not freely available to the assessee. By contrast, transfers to the development reserve and special reserve were not deductible because the amounts remained available for business use and no overriding legal diversion of income was shown. en-us Fri, 08 Dec 1972 00:00:00 +0530 Thu, 22 Jan 2026 15:38:13 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8995 A statutory reserve is deductible only where the governing law creates an overriding diversion of revenue so that the amount never forms part of the assessee's real profits. On that principle, the contingencies reserve under the Electricity (Supply) Act was treated as deductible because it was restricted by statute, had to be invested in authorised securities, and was not freely available to the assessee. By contrast, transfers to the development reserve and special reserve were not deductible because the amounts remained available for business use and no overriding legal diversion of income was shown. Case-Laws Income Tax Fri, 08 Dec 1972 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8995