https://www.taxtmi.com/caselaws?id=166277 The note addresses whether a dividend declared on 18-10-1941 accrues as income in the relevant previous year under the mercantile (accrual) concept and interprets the phrase in Section 16(2) of the Income-tax Act, 1922. It reasons that declaration creates the company's liability and vests in shareholders a present right to the amount, so accrual occurs on declaration notwithstanding later payment dates; a literal requirement of actual payment is impractical. Operative effect: the dividend is taxable in the previous year in which it was declared, not when paid. en-us Tue, 16 Mar 1948 00:00:00 +0530 Fri, 12 Sep 2014 12:42:46 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=166277 The note addresses whether a dividend declared on 18-10-1941 accrues as income in the relevant previous year under the mercantile (accrual) concept and interprets the phrase in Section 16(2) of the Income-tax Act, 1922. It reasons that declaration creates the company's liability and vests in shareholders a present right to the amount, so accrual occurs on declaration notwithstanding later payment dates; a literal requirement of actual payment is impractical. Operative effect: the dividend is taxable in the previous year in which it was declared, not when paid. Case-Laws Income Tax Tue, 16 Mar 1948 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=166277