https://www.taxtmi.com/caselaws?id=277447 An insurance company's reserve for unexpired risks was analysed under Rule 2 of Schedule II of the Excess Profits Tax Act, 1940. The court explained that "debt" means a present liability, even if payable later, whereas a contingent claim is not a debt until the relevant contingency occurs. The unexpired risk reserve was treated as a temporary provision for possible future claims, not borrowed money or an existing debt, and it was also not an accruing liability because no enforceable liability existed during the contract's subsistence unless and until the contingency happened. The reserve was therefore not deductible in computing average capital employed. en-us Tue, 22 Feb 1949 00:00:00 +0530 Tue, 04 Dec 2018 14:46:37 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=277447 An insurance company's reserve for unexpired risks was analysed under Rule 2 of Schedule II of the Excess Profits Tax Act, 1940. The court explained that "debt" means a present liability, even if payable later, whereas a contingent claim is not a debt until the relevant contingency occurs. The unexpired risk reserve was treated as a temporary provision for possible future claims, not borrowed money or an existing debt, and it was also not an accruing liability because no enforceable liability existed during the contract's subsistence unless and until the contingency happened. The reserve was therefore not deductible in computing average capital employed. Case-Laws Income Tax Tue, 22 Feb 1949 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=277447