https://www.taxtmi.com/caselaws?id=39398 Depreciation in the value of shares held as an investment could be treated as a relevant business factor in deciding whether dividend withholding was unreasonable under section 23A of the Indian Income-tax Act, 1922. The Court applied a prudent businessman test, requiring the tax authority to consider prior losses, present profits, available surplus and the reasonable needs of the future from the company's commercial standpoint. It held that a substantial fall in investment value could properly be taken into account even if no cash loss had been realised, because directors need not ignore an actual diminution in asset value and speculate on recovery. The company's refusal to declare dividend was therefore not unreasonable. en-us Fri, 06 Sep 1974 00:00:00 +0530 Fri, 16 Apr 2010 12:24:40 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39398 Depreciation in the value of shares held as an investment could be treated as a relevant business factor in deciding whether dividend withholding was unreasonable under section 23A of the Indian Income-tax Act, 1922. The Court applied a prudent businessman test, requiring the tax authority to consider prior losses, present profits, available surplus and the reasonable needs of the future from the company's commercial standpoint. It held that a substantial fall in investment value could properly be taken into account even if no cash loss had been realised, because directors need not ignore an actual diminution in asset value and speculate on recovery. The company's refusal to declare dividend was therefore not unreasonable. Case-Laws Income Tax Fri, 06 Sep 1974 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39398