https://www.taxtmi.com/caselaws?id=39008 For capital computation under rule 1 of the Second Schedule to the Super Profits Tax Act, an amount set aside to meet an existing tax liability is treated as a provision and not a reserve, so it is excluded from capital. By contrast, an amount specifically appropriated out of profits for a future purpose, such as proposed dividend, is treated as a reserve if the substance of the entry shows it was kept apart on the balance-sheet date, and later shareholder approval does not change that character. The document applies the commercial accounting distinction between provision and reserve and emphasises the substance of the entry as on the relevant date. en-us Mon, 28 Jun 1976 00:00:00 +0530 Mon, 12 Apr 2010 10:09:32 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39008 For capital computation under rule 1 of the Second Schedule to the Super Profits Tax Act, an amount set aside to meet an existing tax liability is treated as a provision and not a reserve, so it is excluded from capital. By contrast, an amount specifically appropriated out of profits for a future purpose, such as proposed dividend, is treated as a reserve if the substance of the entry shows it was kept apart on the balance-sheet date, and later shareholder approval does not change that character. The document applies the commercial accounting distinction between provision and reserve and emphasises the substance of the entry as on the relevant date. Case-Laws Income Tax Mon, 28 Jun 1976 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39008