https://www.taxtmi.com/caselaws?id=40191 Amounts appropriated by a banking company for bad and doubtful debts were treated as reserves, not provisions, for surtax purposes. A provision is a charge against profits made to meet a known liability, or one legitimately and reasonably anticipated on the balance-sheet date, while a reserve is an appropriation of profits not intended to meet such liability. On the facts, no bad debt had been written off or adjusted, no deduction had been claimed or allowed, and the sums remained employed in the business and were treated as reserves. Mere business apprehension of future bad debts did not convert the appropriation into a provision, so the amounts qualified for exclusion from chargeable profits and inclusion in capital. en-us Wed, 13 Mar 1996 00:00:00 +0530 Wed, 09 Jul 2014 17:28:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=40191 Amounts appropriated by a banking company for bad and doubtful debts were treated as reserves, not provisions, for surtax purposes. A provision is a charge against profits made to meet a known liability, or one legitimately and reasonably anticipated on the balance-sheet date, while a reserve is an appropriation of profits not intended to meet such liability. On the facts, no bad debt had been written off or adjusted, no deduction had been claimed or allowed, and the sums remained employed in the business and were treated as reserves. Mere business apprehension of future bad debts did not convert the appropriation into a provision, so the amounts qualified for exclusion from chargeable profits and inclusion in capital. Case-Laws Income Tax Wed, 13 Mar 1996 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=40191