https://www.taxtmi.com/caselaws?id=19312 Amount set apart to meet leave pay liability was held to be a provision and not a reserve for capital computation under the Companies (Profits) Surtax Act, 1964. The distinction turns on whether the sum is appropriated out of profits to form part of capital employed, or is charged against profits to meet a known liability. Because the leave wage obligation was a statutory liability under the Factories Act and the amount was earmarked for that existing obligation, it could not be treated as a reserve merely because the corresponding deduction was disallowed or payment was deferred. It was therefore excluded from capital as reserve for surtax purposes. en-us Tue, 07 Jun 1994 00:00:00 +0530 Thu, 05 Nov 2009 13:15:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=19312 Amount set apart to meet leave pay liability was held to be a provision and not a reserve for capital computation under the Companies (Profits) Surtax Act, 1964. The distinction turns on whether the sum is appropriated out of profits to form part of capital employed, or is charged against profits to meet a known liability. Because the leave wage obligation was a statutory liability under the Factories Act and the amount was earmarked for that existing obligation, it could not be treated as a reserve merely because the corresponding deduction was disallowed or payment was deferred. It was therefore excluded from capital as reserve for surtax purposes. Case-Laws Income Tax Tue, 07 Jun 1994 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=19312