https://www.taxtmi.com/caselaws?id=28489 Capital under Schedule II of the Companies (Profits) Surtax Act, 1964 is computed by reference to the character of amounts standing to the credit of reserves on the first day of the accounting year. Where a dividend has been recommended out of general reserve, the amount is intended for distribution to shareholders and is no longer available as reserve for capital computation. Applying the principle in Vazir Sultan Tobacco Co., the High Court treated the recommended dividend as inconsistent with continued reserve treatment; Rule 1A of the Second Schedule was viewed as reflecting the same principle. The sum of Rs. 2,03,250 had therefore to be deducted from general reserve, and the issue was answered against the assessee. en-us Wed, 18 Nov 1981 00:00:00 +0530 Tue, 23 Feb 2010 10:42:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=28489 Capital under Schedule II of the Companies (Profits) Surtax Act, 1964 is computed by reference to the character of amounts standing to the credit of reserves on the first day of the accounting year. Where a dividend has been recommended out of general reserve, the amount is intended for distribution to shareholders and is no longer available as reserve for capital computation. Applying the principle in Vazir Sultan Tobacco Co., the High Court treated the recommended dividend as inconsistent with continued reserve treatment; Rule 1A of the Second Schedule was viewed as reflecting the same principle. The sum of Rs. 2,03,250 had therefore to be deducted from general reserve, and the issue was answered against the assessee. Case-Laws Income Tax Wed, 18 Nov 1981 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=28489