https://www.taxtmi.com/caselaws?id=38593 Section 23A requires dividend adequacy to be tested on commercial principles by considering the company's overall financial position, not assessable income alone. Outstanding income-tax liabilities of earlier years were relevant liabilities in that enquiry and had to be taken into account when judging distributable surplus and the reasonableness of the dividend declared. Alleged fictitious commission and brokerage could not be treated as available funds unless actual availability in the relevant year was shown. On those facts, the arrears of tax materially reduced the surplus and the basis for invoking section 23A failed. en-us Thu, 19 Jun 1975 00:00:00 +0530 Wed, 07 Apr 2010 14:46:01 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=38593 Section 23A requires dividend adequacy to be tested on commercial principles by considering the company's overall financial position, not assessable income alone. Outstanding income-tax liabilities of earlier years were relevant liabilities in that enquiry and had to be taken into account when judging distributable surplus and the reasonableness of the dividend declared. Alleged fictitious commission and brokerage could not be treated as available funds unless actual availability in the relevant year was shown. On those facts, the arrears of tax materially reduced the surplus and the basis for invoking section 23A failed. Case-Laws Income Tax Thu, 19 Jun 1975 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=38593