TaxTMI 
TaxTMI 
1992 (12) TMI 108
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....the CIT(A), Belgaum dt. 16-9-1988 wherein, inter alia, he has observed that provision for taxation was found to be excess and therefore, it was written back. Consequently he held that such excess provision did not go to increase the reserve so as to form capital of the company. Therefore, he has rejected the claim of the assessee for including the excess provision for tax as part of capital. The a....
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.... Officer on the view that the Supreme Court has held that the provision reasonably necessary should be treated as reserve and in the case of the assessee, the provision made was excessive and therefore, it is written back and consequently could not form part of reserve. 4. At the time of hearing, the learned counsel for the assessee as well as the learned departmental representative have been dul....
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....eneral proposition. The Supreme Court in the case of Vazir Sultan Tobacco Co. Ltd. had laid down that though the amount set apart by the Board of Directors of a company for liability to taxation in respect of the profits which it has earned during the year will have to be regarded as a provision for a known and existing liability, the quantification whereof has to be done later and it is, therefor....
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....of the amount which should have been reasonably credited the amount of its capital as computed under Rule 1 shall be reduced by the amount which has not been so credited or as the case may be the amount of such shortfall. Therefore, it is clear that in case of no provision or shortfall in provision capital is to be reduced. Conversely if excess provision for tax liability is made, reverse of the r....