https://www.taxtmi.com/caselaws?id=28801 An appropriation to a gratuity reserve is ordinarily a provision for contingent liability, not a reserve, and an ad hoc transfer without scientific or actuarial valuation does not qualify for inclusion in capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964. Only any excess over a proper actuarial liability may potentially be treated as a reserve. On the facts, the amount set apart for expected gratuity liability was not shown to exceed the actuarially computed liability, so it was excluded from the company's capital for surtax purposes. en-us Thu, 29 Jul 1982 00:00:00 +0530 Thu, 25 Feb 2010 17:35:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=28801 An appropriation to a gratuity reserve is ordinarily a provision for contingent liability, not a reserve, and an ad hoc transfer without scientific or actuarial valuation does not qualify for inclusion in capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964. Only any excess over a proper actuarial liability may potentially be treated as a reserve. On the facts, the amount set apart for expected gratuity liability was not shown to exceed the actuarially computed liability, so it was excluded from the company's capital for surtax purposes. Case-Laws Income Tax Thu, 29 Jul 1982 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=28801