https://www.taxtmi.com/caselaws?id=175939 Issue of bonus shares was held not to constitute distribution of profits as dividends under Section 23A(1) of the Income-tax Act, 1922. The High Court construed the proviso consistently with the main provision and held that "distribution" there meant distribution by way of dividends, not a mere capitalisation of profits. Because bonus shares do not release company assets in the manner contemplated by the section, they do not satisfy the statutory requirement for dividend distribution or the second proviso's limited shortfall-cure mechanism. The reference was answered against the assessee. en-us Mon, 10 Sep 1951 00:00:00 +0530 Wed, 09 Dec 2015 11:12:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=175939 Issue of bonus shares was held not to constitute distribution of profits as dividends under Section 23A(1) of the Income-tax Act, 1922. The High Court construed the proviso consistently with the main provision and held that "distribution" there meant distribution by way of dividends, not a mere capitalisation of profits. Because bonus shares do not release company assets in the manner contemplated by the section, they do not satisfy the statutory requirement for dividend distribution or the second proviso's limited shortfall-cure mechanism. The reference was answered against the assessee. Case-Laws Income Tax Mon, 10 Sep 1951 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=175939