COMMISSIONER OF INCOME-TAX, U.P. vs LAXMI SUGAR & OIL MILLS LTD.

The Supreme Court held that under the Super Profits Tax Act, 1963, amounts debited by the assessee for additional cane price payable to cane-growers were to be classified as a 'reserve' rather than a 'provision'. The Court emphasized that the true nature of the amounts must be determined beyond their description in the balance-sheet, clarifying that a provision is a charge against profits while a reserve is an appropriation of profits. The Court dismissed the Revenue's appeal, affirming that the amounts should be included in the capital computation as reserves under Rule 1 of the Second Schedule.