deemed reserves for the purpose of the Business Profits Tax Act, if they are specifically allocated to reserves and not otherwise and in support of that contention, he relied upon the decision of this Court in the Century Spinning & Manufacturing Company Ltd.(') Counsel pointed out that in that case this Court reversed the decision of the High Court of Bombay in which accumulated profits were regarded as reserves for the purpose of the Business Profits Tax Act. It is necessary carefully to scrutinise the facts in the Century Spg. & Mfg. Company's case('). For the account year ending December 31, 1945, the profit of the assessee company, amounted to Rs. 90,44,677 /-. After providing for depreciation and taxation there remained an unallocated balance of Rs. 5,08,637 /- which was not allowed in computing· the profits of the assessee for purpose of income-tax. In February 1946, the directors recommended that out of that amount a sum of Rs. 4,92,426/- be distributed as dividend and the balance of Rs. 16,211/- be carried forward to the next year's account. The recommendation was accepted by the shareholders and dividend was shortly thereafter distributed. In computing the capital of the assessee company on April 1, 1946 under the Business Profits Tax Act, 1947, the assessee claimed that Rs. 5,08,637/- carried forward into the account of 1946 should be treated as "reserve" for the purpose of r. 2(1) of Sch. IL This Court negatived the contention. Ghulam Hasan, J., speaking for the Court observed :
