https://www.taxtmi.com/caselaws?id=38957 Gratuity amounts set aside ad hoc, without an approved gratuity scheme or actuarial valuation, were treated as reserves rather than provisions because they were not created to meet an ascertained or existing liability; they were therefore includible in capital for surtax computation under Schedule II. Dividend reserves, however, were not includible in the capital computation under the same provision, as earlier decisions had already settled that question against inclusion. The governing distinction is that an amount set apart for a known liability on a discounted present value basis is a provision, while an amount retained without such valuation is a reserve. en-us Fri, 30 Jul 1976 00:00:00 +0530 Sat, 10 Apr 2010 15:44:02 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=38957 Gratuity amounts set aside ad hoc, without an approved gratuity scheme or actuarial valuation, were treated as reserves rather than provisions because they were not created to meet an ascertained or existing liability; they were therefore includible in capital for surtax computation under Schedule II. Dividend reserves, however, were not includible in the capital computation under the same provision, as earlier decisions had already settled that question against inclusion. The governing distinction is that an amount set apart for a known liability on a discounted present value basis is a provision, while an amount retained without such valuation is a reserve. Case-Laws Income Tax Fri, 30 Jul 1976 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=38957