https://www.taxtmi.com/caselaws?id=37284 Excess depreciation provision is not includible in capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964, unless it is genuinely set apart for future use as a reserve. An adjustment entry transferred to general reserve solely to align the written-down value of fixed assets with the accounting basis does not acquire that character. Under Rule 1(iii), a reserve must also be reduced by amounts already allowed as income-tax deductions. Accordingly, balances in an initial depreciation reserve account that have been deducted in computing taxable income cannot be added again to the surtax capital base. en-us Tue, 31 Jul 1979 00:00:00 +0530 Sat, 27 Mar 2010 17:26:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37284 Excess depreciation provision is not includible in capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964, unless it is genuinely set apart for future use as a reserve. An adjustment entry transferred to general reserve solely to align the written-down value of fixed assets with the accounting basis does not acquire that character. Under Rule 1(iii), a reserve must also be reduced by amounts already allowed as income-tax deductions. Accordingly, balances in an initial depreciation reserve account that have been deducted in computing taxable income cannot be added again to the surtax capital base. Case-Laws Income Tax Tue, 31 Jul 1979 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37284