1985 (10) TMI 27

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.... J. S. VARMA J. -The reference at the instance of the Revenue is made by the Tribunal under section 256(1) of the Income-tax Act, 1961, to answer the following question of law, namely : - "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the amount of Rs. 1,38,000 (assessment year 1973-74) and Rs. 2,61,550 (assessment year....

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....l has, however, been allowed on this point and this contention has been accepted, relying on decision of the Bombay High Court The Tribunal has held that these amounts are to be treated as "reserve" in computing the capital base for the purpose of standard deduction. It has, accordingly, made a consequential order, directing the Surtax Officer to proceed on this basis. Aggrieved by the view tak....

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....riation will constitute a provision, which cannot be treated as a "reserve". The test laid down by the Supreme Court in this decision, while pointing out the distinction between "provision" and "reserve" for deciding such a question, clearly indicates that on the basis of facts found proved, these amounts can only be treated as "Provision" and not "reserve". The Tribunal was, therefore, not justif....