https://www.taxtmi.com/caselaws?id=7059 Section 23A of the Income-tax Act, 1922 requires a commercial assessment of whether a larger dividend could reasonably have been declared, judged from the standpoint of a prudent businessman. The enquiry is not confined to past losses or the smallness of current profits; it must also consider the company's overall financial position, available surplus, future requirements, and other relevant business factors. Applying that test, the company's earlier hedging profit had been substantially eroded by imminent and later actualised losses by the time the dividend decision was made, so a larger dividend could not reasonably have been expected and the order under section 23A was not justified. en-us Fri, 29 Sep 1967 00:00:00 +0530 Sun, 08 Feb 2009 11:05:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7059 Section 23A of the Income-tax Act, 1922 requires a commercial assessment of whether a larger dividend could reasonably have been declared, judged from the standpoint of a prudent businessman. The enquiry is not confined to past losses or the smallness of current profits; it must also consider the company's overall financial position, available surplus, future requirements, and other relevant business factors. Applying that test, the company's earlier hedging profit had been substantially eroded by imminent and later actualised losses by the time the dividend decision was made, so a larger dividend could not reasonably have been expected and the order under section 23A was not justified. Case-Laws Income Tax Fri, 29 Sep 1967 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7059