https://www.taxtmi.com/caselaws?id=27266 Section 104 of the Income-tax Act, 1961 applied where, after a realistic appraisal of the company's financial position and relevant commercial factors, distributable income remained sufficient to attract additional tax. The court applied the prudent businessman standard in computing distributable income under section 109 and held that arrears of earlier years' tax were not deductible because the company had substantial reserves and no earlier losses. It also held that interest on borrowings diverted to sister concerns was not expenditure incurred wholly and exclusively for business and was therefore not deductible. The plea of smallness of profits failed, and additional tax remained chargeable under section 104. en-us Fri, 24 Aug 1984 00:00:00 +0530 Thu, 11 Feb 2010 17:24:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=27266 Section 104 of the Income-tax Act, 1961 applied where, after a realistic appraisal of the company's financial position and relevant commercial factors, distributable income remained sufficient to attract additional tax. The court applied the prudent businessman standard in computing distributable income under section 109 and held that arrears of earlier years' tax were not deductible because the company had substantial reserves and no earlier losses. It also held that interest on borrowings diverted to sister concerns was not expenditure incurred wholly and exclusively for business and was therefore not deductible. The plea of smallness of profits failed, and additional tax remained chargeable under section 104. Case-Laws Income Tax Fri, 24 Aug 1984 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=27266