https://www.taxtmi.com/caselaws?id=26820 Retirement gratuity appropriations under rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 are not automatically a reserve for capital computation. An appropriation towards gratuity liability is ordinarily a provision for a contingent liability; only the amount representing the estimated liability on a scientific actuarial basis can be treated as provision, while any excess may be treated as reserve. The Tribunal must therefore examine the relevant material and separate the provision element from the reserve element. The retirement gratuity amounts could not, as a whole, be characterised as reserve, and the issue was answered against the assessee. en-us Tue, 28 Feb 1984 00:00:00 +0530 Mon, 08 Feb 2010 16:43:01 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=26820 Retirement gratuity appropriations under rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 are not automatically a reserve for capital computation. An appropriation towards gratuity liability is ordinarily a provision for a contingent liability; only the amount representing the estimated liability on a scientific actuarial basis can be treated as provision, while any excess may be treated as reserve. The Tribunal must therefore examine the relevant material and separate the provision element from the reserve element. The retirement gratuity amounts could not, as a whole, be characterised as reserve, and the issue was answered against the assessee. Case-Laws Income Tax Tue, 28 Feb 1984 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=26820