https://www.taxtmi.com/caselaws?id=64450 Mandatory transfer of current profits to a capital redemption reserve for redemption of preference shares is not available for distribution as dividend, because company law requires the appropriation before any dividend can be declared. On a harmonious construction of the income-tax dividend restriction provisions, such legally unavailable profits cannot be treated as distributable income, even though the statute does not expressly refer to this type of corporate reserve. The transfer to general reserve, where contemplated by the income-tax scheme, did not alter the distributable surplus computation. The effect was that the reserve transfer had to be excluded from distributable income, eliminating the dividend shortfall and undermining action taken under section 104(1). en-us Tue, 03 Oct 1989 00:00:00 +0530 Mon, 07 Feb 2011 18:49:32 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=64450 Mandatory transfer of current profits to a capital redemption reserve for redemption of preference shares is not available for distribution as dividend, because company law requires the appropriation before any dividend can be declared. On a harmonious construction of the income-tax dividend restriction provisions, such legally unavailable profits cannot be treated as distributable income, even though the statute does not expressly refer to this type of corporate reserve. The transfer to general reserve, where contemplated by the income-tax scheme, did not alter the distributable surplus computation. The effect was that the reserve transfer had to be excluded from distributable income, eliminating the dividend shortfall and undermining action taken under section 104(1). Case-Laws Income Tax Tue, 03 Oct 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=64450