https://www.taxtmi.com/caselaws?id=286519 For surtax capital computation, the character of an amount appropriated from dividend reserve depends on its substance on the relevant valuation date. An amount set apart to meet a crystallised dividend liability is a provision, not a reserve, and the accounting label is not decisive. Once shareholders resolve to pay dividend, the liability to that extent crystallises and relates back to the accounting date. Applying that principle, the amount appropriated towards declared dividend was treated as a liability/provision and excluded from reserve capital, while only the balance retained its reserve character. en-us Mon, 14 Jan 1991 00:00:00 +0530 Mon, 02 Mar 2020 11:47:26 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=286519 For surtax capital computation, the character of an amount appropriated from dividend reserve depends on its substance on the relevant valuation date. An amount set apart to meet a crystallised dividend liability is a provision, not a reserve, and the accounting label is not decisive. Once shareholders resolve to pay dividend, the liability to that extent crystallises and relates back to the accounting date. Applying that principle, the amount appropriated towards declared dividend was treated as a liability/provision and excluded from reserve capital, while only the balance retained its reserve character. Case-Laws Income Tax Mon, 14 Jan 1991 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=286519