https://www.taxtmi.com/caselaws?id=36652 Amounts assessed as balancing charges under section 41(2) could not be treated as a company's accumulated profits for section 2(22)(c), because accumulated profits mean profits in the commercial sense and not every amount brought to tax by a deeming provision. The legal fiction in section 41(2) was confined to assessment under that provision and could not be extended to convert the capital receipt into accumulated profits for taxing shareholders on liquidation. Accordingly, distributions made on liquidation were not taxable as deemed dividends to the extent based on such sums. en-us Fri, 09 Mar 1979 00:00:00 +0530 Tue, 23 Mar 2010 16:58:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=36652 Amounts assessed as balancing charges under section 41(2) could not be treated as a company's accumulated profits for section 2(22)(c), because accumulated profits mean profits in the commercial sense and not every amount brought to tax by a deeming provision. The legal fiction in section 41(2) was confined to assessment under that provision and could not be extended to convert the capital receipt into accumulated profits for taxing shareholders on liquidation. Accordingly, distributions made on liquidation were not taxable as deemed dividends to the extent based on such sums. Case-Laws Income Tax Fri, 09 Mar 1979 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=36652