https://www.taxtmi.com/caselaws?id=38298 An amount set apart for taxation was treated as a reserve, not a provision, for capital computation under rule 1 of the Second Schedule to the Super Profits Tax Act, 1963. The court reasoned that, on the balance-sheet date, there was no existing real or contingent tax liability in respect of incomplete contracts, since the assessee was taxed on completed contracts and estimated future tax did not correspond to a known present liability. A provision requires an identifiable liability or contingency existing at that date, whereas a reserve is an appropriation of profits not earmarked to meet such liability. The amount was therefore includible in capital, and later adjustment of part of it did not change its character. en-us Thu, 24 Nov 1977 00:00:00 +0530 Mon, 05 Apr 2010 13:31:32 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=38298 An amount set apart for taxation was treated as a reserve, not a provision, for capital computation under rule 1 of the Second Schedule to the Super Profits Tax Act, 1963. The court reasoned that, on the balance-sheet date, there was no existing real or contingent tax liability in respect of incomplete contracts, since the assessee was taxed on completed contracts and estimated future tax did not correspond to a known present liability. A provision requires an identifiable liability or contingency existing at that date, whereas a reserve is an appropriation of profits not earmarked to meet such liability. The amount was therefore includible in capital, and later adjustment of part of it did not change its character. Case-Laws Income Tax Thu, 24 Nov 1977 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=38298