https://www.taxtmi.com/caselaws?id=39864 An amount earmarked as proposed dividend does not become a reserve for capital computation under rule 1 of the Second Schedule to the Super Profits Tax Act, 1963. A reserve requires a clear appropriation showing that the sum is kept apart for future use or a specified purpose; where the amount is intended for distribution as dividend in the same year and is shown as provision for dividend, it remains undistributed profit rather than reserve. The substance of the appropriation, not the accounting label, determines its character. Accordingly, proposed dividend could not be included in the capital computation. en-us Mon, 08 Apr 1974 00:00:00 +0530 Tue, 20 Apr 2010 17:23:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39864 An amount earmarked as proposed dividend does not become a reserve for capital computation under rule 1 of the Second Schedule to the Super Profits Tax Act, 1963. A reserve requires a clear appropriation showing that the sum is kept apart for future use or a specified purpose; where the amount is intended for distribution as dividend in the same year and is shown as provision for dividend, it remains undistributed profit rather than reserve. The substance of the appropriation, not the accounting label, determines its character. Accordingly, proposed dividend could not be included in the capital computation. Case-Laws Income Tax Mon, 08 Apr 1974 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39864