https://www.taxtmi.com/caselaws?id=37789 For section 23A(1), dividend reasonableness is tested on commercial principles from the standpoint of a prudent director, and depreciation charged in the accounts is a real commercial deduction even if it relates to earlier years, so additional depreciation was deductible in computing distributable profits. The same commercial approach applies to capital profits credited under section 10(2)(vii): the sum credited on sale of capital assets was treated as part of the company's replacement reserve and did not alter the reasonableness of the dividend. On that commercial assessment of past profits and losses, the declared dividend was reasonable and no additional super-tax was warranted. en-us Tue, 02 May 1978 00:00:00 +0530 Thu, 01 Apr 2010 11:32:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37789 For section 23A(1), dividend reasonableness is tested on commercial principles from the standpoint of a prudent director, and depreciation charged in the accounts is a real commercial deduction even if it relates to earlier years, so additional depreciation was deductible in computing distributable profits. The same commercial approach applies to capital profits credited under section 10(2)(vii): the sum credited on sale of capital assets was treated as part of the company's replacement reserve and did not alter the reasonableness of the dividend. On that commercial assessment of past profits and losses, the declared dividend was reasonable and no additional super-tax was warranted. Case-Laws Income Tax Tue, 02 May 1978 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37789