https://www.taxtmi.com/caselaws?id=23155 Dividend declared after the relevant valuation date does not relate back to that date for capital computation under the Second Schedule to the Companies (Profits) Surtax Act, 1964. The liability to pay dividend arises only when shareholders declare it in the annual general meeting, not on a directors' recommendation alone. Where no reserve had been created out of the year's profits for dividend distribution, the declared final dividend was not a known or existing liability on the valuation date and therefore did not require deduction from the general reserve. The Supreme Court decision relied on by the Revenue was distinguished on the basis that it concerned a reserve created from current-year profits for dividend distribution. en-us Tue, 20 Dec 1988 00:00:00 +0530 Thu, 17 Dec 2009 11:28:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=23155 Dividend declared after the relevant valuation date does not relate back to that date for capital computation under the Second Schedule to the Companies (Profits) Surtax Act, 1964. The liability to pay dividend arises only when shareholders declare it in the annual general meeting, not on a directors' recommendation alone. Where no reserve had been created out of the year's profits for dividend distribution, the declared final dividend was not a known or existing liability on the valuation date and therefore did not require deduction from the general reserve. The Supreme Court decision relied on by the Revenue was distinguished on the basis that it concerned a reserve created from current-year profits for dividend distribution. Case-Laws Income Tax Tue, 20 Dec 1988 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=23155