https://www.taxtmi.com/caselaws?id=40060 For surtax capital computation under the Companies Profits (Surtax) Act, the commercial distinction between a reserve and a provision controlled classification. Investment reserve and rehabilitation reserve were treated as appropriations of profits not set apart for existing liabilities on the balance-sheet date, so they qualified as reserves and were includible in capital. By contrast, forfeited dividend reserve represented unpaid dividends payable on shareholder claims and was treated as an existing liability, so it was not a reserve and was excluded. The governing principle is that only amounts retained as capital employed in the business count as reserves; sums earmarked to meet known obligations are provisions. en-us Thu, 31 Jul 1986 00:00:00 +0530 Tue, 29 Jul 2014 17:27:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=40060 For surtax capital computation under the Companies Profits (Surtax) Act, the commercial distinction between a reserve and a provision controlled classification. Investment reserve and rehabilitation reserve were treated as appropriations of profits not set apart for existing liabilities on the balance-sheet date, so they qualified as reserves and were includible in capital. By contrast, forfeited dividend reserve represented unpaid dividends payable on shareholder claims and was treated as an existing liability, so it was not a reserve and was excluded. The governing principle is that only amounts retained as capital employed in the business count as reserves; sums earmarked to meet known obligations are provisions. Case-Laws Income Tax Thu, 31 Jul 1986 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=40060