https://www.taxtmi.com/caselaws?id=6850 Section 23A was applied by testing whether a closely held company had failed to distribute the prescribed proportion of assessable income without commercial justification. The relevant enquiry turned on net commercial profit, statutory reserve requirements under banking law, and the company's overall financial position, assessed from a prudent businessman's perspective. On the facts, the profits for both years were very small relative to capital, and amounts transferred to reserves were not available for ordinary dividend distribution. The commercial impact on credit and the practical dividend capacity also supported the view that non-distribution was reasonable. The provision was therefore held inapplicable for both assessment years. en-us Fri, 15 Apr 1966 00:00:00 +0530 Fri, 06 Feb 2009 17:27:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6850 Section 23A was applied by testing whether a closely held company had failed to distribute the prescribed proportion of assessable income without commercial justification. The relevant enquiry turned on net commercial profit, statutory reserve requirements under banking law, and the company's overall financial position, assessed from a prudent businessman's perspective. On the facts, the profits for both years were very small relative to capital, and amounts transferred to reserves were not available for ordinary dividend distribution. The commercial impact on credit and the practical dividend capacity also supported the view that non-distribution was reasonable. The provision was therefore held inapplicable for both assessment years. Case-Laws Income Tax Fri, 15 Apr 1966 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6850