https://www.taxtmi.com/caselaws?id=8863 A running debit balance in connected accounts may still be treated as a loan or advance to a shareholder for the deemed-dividend provision, because the combined account position can show a continuing overdraft rather than a mere current account. The fiction, however, operates only to the extent of accumulated profits, which must be computed after allowing depreciation as required under the Income-tax Act and not by mechanically adopting balance-sheet reserves. On that basis, the text states that the advance could not be taxed as dividend income because no sufficient accumulated profits remained after proper depreciation adjustment. en-us Tue, 03 Oct 1972 00:00:00 +0530 Tue, 16 Jun 2009 13:15:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8863 A running debit balance in connected accounts may still be treated as a loan or advance to a shareholder for the deemed-dividend provision, because the combined account position can show a continuing overdraft rather than a mere current account. The fiction, however, operates only to the extent of accumulated profits, which must be computed after allowing depreciation as required under the Income-tax Act and not by mechanically adopting balance-sheet reserves. On that basis, the text states that the advance could not be taxed as dividend income because no sufficient accumulated profits remained after proper depreciation adjustment. Case-Laws Income Tax Tue, 03 Oct 1972 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8863