https://www.taxtmi.com/caselaws?id=22250 Gratuity amounts set aside against an existing liability do not qualify as reserves to that extent under rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964; the reserve must be split to identify the liability component, and relief follows only for the true reserve element. The dollar revaluation reserve was includible in capital base because the paid-up share capital remained unchanged in dollar terms and the rupee increase reflected only devaluation, not revaluation of a book asset under Explanation 1 to rule 2. The reserve was therefore treated as an accretion to paid-up share capital for surtax purposes. en-us Wed, 30 Nov 1988 00:00:00 +0530 Tue, 08 Dec 2009 13:20:52 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22250 Gratuity amounts set aside against an existing liability do not qualify as reserves to that extent under rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964; the reserve must be split to identify the liability component, and relief follows only for the true reserve element. The dollar revaluation reserve was includible in capital base because the paid-up share capital remained unchanged in dollar terms and the rupee increase reflected only devaluation, not revaluation of a book asset under Explanation 1 to rule 2. The reserve was therefore treated as an accretion to paid-up share capital for surtax purposes. Case-Laws Income Tax Wed, 30 Nov 1988 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22250