https://www.taxtmi.com/caselaws?id=39404 For section 23A of the Indian Income-tax Act, 1922, distributable profits must be determined by reference to actual commercial profits available to the company, not notional or assessable income. A dividend merely declared in favour of the assessee, but not actually paid, credited, or distributed, does not become part of commercial profits for this purpose. The mercantile system may govern income computation, but it does not convert a declared dividend into a real profit available for distribution. The analysis applies the prudent businessman test and treats only money actually reaching the company as relevant to the profit base. en-us Tue, 04 Mar 1975 00:00:00 +0530 Fri, 16 Apr 2010 12:34:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39404 For section 23A of the Indian Income-tax Act, 1922, distributable profits must be determined by reference to actual commercial profits available to the company, not notional or assessable income. A dividend merely declared in favour of the assessee, but not actually paid, credited, or distributed, does not become part of commercial profits for this purpose. The mercantile system may govern income computation, but it does not convert a declared dividend into a real profit available for distribution. The analysis applies the prudent businessman test and treats only money actually reaching the company as relevant to the profit base. Case-Laws Income Tax Tue, 04 Mar 1975 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39404