https://www.taxtmi.com/caselaws?id=25693 In applying section 23A(1), the reasonableness of non-declaration of dividend had to be judged from the standpoint of a prudent businessman, taking the overall financial position into account. Past commercial losses were relevant and reserves were not to be set off against those losses merely to deny the reasonableness of withholding dividend. Contingent liabilities also formed part of the financial assessment and could justify non-declaration where the company had sustained losses and faced substantial liabilities. The tax authority could not substitute its own business judgment for that of the directors, and the reference was answered in favour of the assessee on both issues. en-us Mon, 09 Mar 1987 00:00:00 +0530 Sat, 30 Jan 2010 12:15:20 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=25693 In applying section 23A(1), the reasonableness of non-declaration of dividend had to be judged from the standpoint of a prudent businessman, taking the overall financial position into account. Past commercial losses were relevant and reserves were not to be set off against those losses merely to deny the reasonableness of withholding dividend. Contingent liabilities also formed part of the financial assessment and could justify non-declaration where the company had sustained losses and faced substantial liabilities. The tax authority could not substitute its own business judgment for that of the directors, and the reference was answered in favour of the assessee on both issues. Case-Laws Income Tax Mon, 09 Mar 1987 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=25693