https://www.taxtmi.com/caselaws?id=20816 Dividends declared out of general reserves were treated as a crystallised liability rather than part of the reserves for surtax capital computation. The Court applied the principle that an amount earmarked for an ascertained liability is a provision, not a reserve, and held that once dividend declarations were made, the corresponding liability reduced the general reserves on the valuation dates. Even where payment to non-resident shareholders depended on Reserve Bank approval under exchange control law, the dividend related back to the earlier accounting years and could not remain in the reserve base. The questions were answered in favour of the Revenue. en-us Mon, 15 Feb 1993 00:00:00 +0530 Tue, 17 Nov 2009 13:34:13 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=20816 Dividends declared out of general reserves were treated as a crystallised liability rather than part of the reserves for surtax capital computation. The Court applied the principle that an amount earmarked for an ascertained liability is a provision, not a reserve, and held that once dividend declarations were made, the corresponding liability reduced the general reserves on the valuation dates. Even where payment to non-resident shareholders depended on Reserve Bank approval under exchange control law, the dividend related back to the earlier accounting years and could not remain in the reserve base. The questions were answered in favour of the Revenue. Case-Laws Income Tax Mon, 15 Feb 1993 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=20816