https://www.taxtmi.com/caselaws?id=9180 For computing capital under the Super Profits Tax Act, an appropriation is a reserve only if it is clearly earmarked as surplus for future use and not set apart to meet a known liability, whether present or contingent. The court applied the real nature of the appropriation rather than the balance-sheet label, noting that tax liability is a present liability even if quantification is deferred, gratuity was a known contractual liability, and the recommended dividend was specifically identified for payment. On those facts, the amounts set apart for taxation, gratuity, and dividends were provisions, not reserves, and were excluded from capital computation. en-us Fri, 01 Sep 1972 00:00:00 +0530 Sat, 20 Jun 2009 11:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=9180 For computing capital under the Super Profits Tax Act, an appropriation is a reserve only if it is clearly earmarked as surplus for future use and not set apart to meet a known liability, whether present or contingent. The court applied the real nature of the appropriation rather than the balance-sheet label, noting that tax liability is a present liability even if quantification is deferred, gratuity was a known contractual liability, and the recommended dividend was specifically identified for payment. On those facts, the amounts set apart for taxation, gratuity, and dividends were provisions, not reserves, and were excluded from capital computation. Case-Laws Income Tax Fri, 01 Sep 1972 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=9180