https://www.taxtmi.com/caselaws?id=7960 Capital gains realised on the sale of a capital asset are not ordinarily part of commercial profits for determining the "smallness of profits" under section 23A of the Income-tax Act, 1922. The provision requires dividend distribution to be judged on commercial principles from the standpoint of a prudent businessman, not by treating every item of assessable income as distributable profit. The text distinguishes business profits from capital gains and notes that capital receipts are usually needed for asset replacement or re-employment in the business rather than dividend distribution. Taxability alone does not convert capital gains into commercial or accounting profits. en-us Mon, 23 Feb 1970 00:00:00 +0530 Thu, 26 Mar 2009 10:56:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7960 Capital gains realised on the sale of a capital asset are not ordinarily part of commercial profits for determining the "smallness of profits" under section 23A of the Income-tax Act, 1922. The provision requires dividend distribution to be judged on commercial principles from the standpoint of a prudent businessman, not by treating every item of assessable income as distributable profit. The text distinguishes business profits from capital gains and notes that capital receipts are usually needed for asset replacement or re-employment in the business rather than dividend distribution. Taxability alone does not convert capital gains into commercial or accounting profits. Case-Laws Income Tax Mon, 23 Feb 1970 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7960