https://www.taxtmi.com/caselaws?id=37734 For capital computation under the Second Schedule to the Companies (Profits) Surtax Act, 1964, the character of an item as reserve or liability is determined as on the first day of the accounting year. A provision for taxation is treated as an accrued liability, estimated outstanding claims in insurance are liabilities, unearned premium is only a balancing entry, and premium deposits remain earmarked for a specific purpose rather than part of reserves. A proposed dividend does not create an accrued liability merely because directors have recommended it, but the amount set apart is still treated as a provision or reserve for a specific purpose and was not excluded under rule 2(ii). en-us Wed, 09 Nov 1977 00:00:00 +0530 Wed, 31 Mar 2010 17:06:10 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37734 For capital computation under the Second Schedule to the Companies (Profits) Surtax Act, 1964, the character of an item as reserve or liability is determined as on the first day of the accounting year. A provision for taxation is treated as an accrued liability, estimated outstanding claims in insurance are liabilities, unearned premium is only a balancing entry, and premium deposits remain earmarked for a specific purpose rather than part of reserves. A proposed dividend does not create an accrued liability merely because directors have recommended it, but the amount set apart is still treated as a provision or reserve for a specific purpose and was not excluded under rule 2(ii). Case-Laws Income Tax Wed, 09 Nov 1977 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37734