https://www.taxtmi.com/caselaws?id=70820 A dividend declared by a company in general meeting creates an enforceable liability to shareholders under the Companies Act, 1956. The temporary payment restriction in section 5 of the Companies (Temporary Restrictions on Dividends) Act, 1974 suspended payment beyond the permitted limit but did not extinguish the liability already created by the declaration. Where the declared dividend was chargeable against general reserve, it retained the character of a provision for that liability and had to be deducted from general reserve in computing capital for surtax purposes. The unpaid dividend amount was therefore rightly reduced from general reserve, and the assessee-company obtained no relief. en-us Fri, 29 Jul 1983 00:00:00 +0530 Tue, 19 Apr 2011 14:17:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=70820 A dividend declared by a company in general meeting creates an enforceable liability to shareholders under the Companies Act, 1956. The temporary payment restriction in section 5 of the Companies (Temporary Restrictions on Dividends) Act, 1974 suspended payment beyond the permitted limit but did not extinguish the liability already created by the declaration. Where the declared dividend was chargeable against general reserve, it retained the character of a provision for that liability and had to be deducted from general reserve in computing capital for surtax purposes. The unpaid dividend amount was therefore rightly reduced from general reserve, and the assessee-company obtained no relief. Case-Laws Income Tax Fri, 29 Jul 1983 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=70820