COMMNR. OF INCOME TAX, TRIVANDRUM vs M/S TRANVANCORE TITANIUM PRODUCTS LTD.

The Supreme Court upheld the High Court's ruling that the loan redemption reserve of Rs.1 crore is a reserve and not a provision under the Income Tax Act, 1961 and the Companies (Profits) Surtax Act, 1964. The Court clarified that the reserve was created voluntarily by the assessee and did not constitute a fresh liability, thus it should be included in the computation of capital for surtax purposes. The appeal by the revenue was dismissed, affirming the Tribunal's decision.