https://www.taxtmi.com/caselaws?id=60345 For surtax capital computation, a proposed dividend is an amount set apart for a known allocation and must be excluded from the general reserve used to determine the capital base. Conversely, a debenture stock redemption reserve created from profit and loss surplus may be included where it does not diminish assets, is shown under reserves and surplus, and is not a charge against profits or a provision for a known liability. Classification depends on the amount's substance and accountancy treatment rather than its accounting label. An earmarked sum may remain a reserve when retained for a future contingent business purpose without creating a present liability. en-us Mon, 10 May 1982 00:00:00 +0530 Tue, 04 Jan 2011 17:31:07 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=60345 For surtax capital computation, a proposed dividend is an amount set apart for a known allocation and must be excluded from the general reserve used to determine the capital base. Conversely, a debenture stock redemption reserve created from profit and loss surplus may be included where it does not diminish assets, is shown under reserves and surplus, and is not a charge against profits or a provision for a known liability. Classification depends on the amount's substance and accountancy treatment rather than its accounting label. An earmarked sum may remain a reserve when retained for a future contingent business purpose without creating a present liability. Case-Laws Income Tax Mon, 10 May 1982 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=60345