https://www.taxtmi.com/caselaws?id=40205 Amounts set aside to meet known liabilities are treated as provisions, not reserves, for capital computation under the surtax regime. Applying the Companies Act distinction between provisions and reserves, the Supreme Court commentary explains that a liability to redeem debentures arises when the borrowing is incurred, so a debenture redemption reserve earmarked for that liability cannot be counted as reserve capital. The same principle applies to gratuity: amounts appropriated for an ascertained gratuity obligation remain provisions even if payment falls due later. The governing rule is that sums retained for existing liabilities are excluded from reserves for surtax capital purposes. en-us Tue, 29 Jul 1997 00:00:00 +0530 Fri, 04 Jul 2014 17:06:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=40205 Amounts set aside to meet known liabilities are treated as provisions, not reserves, for capital computation under the surtax regime. Applying the Companies Act distinction between provisions and reserves, the Supreme Court commentary explains that a liability to redeem debentures arises when the borrowing is incurred, so a debenture redemption reserve earmarked for that liability cannot be counted as reserve capital. The same principle applies to gratuity: amounts appropriated for an ascertained gratuity obligation remain provisions even if payment falls due later. The governing rule is that sums retained for existing liabilities are excluded from reserves for surtax capital purposes. Case-Laws Income Tax Tue, 29 Jul 1997 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=40205