https://www.taxtmi.com/caselaws?id=38937 Section 23A of the Indian Income-tax Act, 1922 applies where a private company fails to distribute the prescribed statutory percentage of assessable income unless earlier losses or the smallness of profits make a larger dividend unreasonable. For this purpose, profits are to be assessed as commercial profits from the standpoint of a prudent businessman. Tax liability is relevant because it reduces distributable commercial profit, and delay in declaring dividends beyond the statutory period is also a relevant circumstance. Capital expenditure, however, is not by itself a proper factor in judging the smallness of profits, as it may be financed from capital or other sources and may support earning capacity. en-us Thu, 01 May 1975 00:00:00 +0530 Sat, 10 Apr 2010 14:04:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=38937 Section 23A of the Indian Income-tax Act, 1922 applies where a private company fails to distribute the prescribed statutory percentage of assessable income unless earlier losses or the smallness of profits make a larger dividend unreasonable. For this purpose, profits are to be assessed as commercial profits from the standpoint of a prudent businessman. Tax liability is relevant because it reduces distributable commercial profit, and delay in declaring dividends beyond the statutory period is also a relevant circumstance. Capital expenditure, however, is not by itself a proper factor in judging the smallness of profits, as it may be financed from capital or other sources and may support earning capacity. Case-Laws Income Tax Thu, 01 May 1975 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=38937