https://www.taxtmi.com/caselaws?id=39633 Section 23A(1) applies only when non-distribution of dividend is not justified by losses or by the smallness of profits, assessed on commercial principles from the standpoint of a prudent businessman. Assessable income and commercial profits are not identical, so an amount brought to tax does not automatically become distributable profit. On the company's balance-sheet and profit and loss account, its weak financial position, heavy indebtedness, doubtful recoveries and negligible surplus showed that dividend declaration would have been unreasonable and prejudicial to creditors. Disputed Government dues also supported the directors' decision not to declare dividend, so the provision was not attracted. en-us Fri, 03 Aug 1973 00:00:00 +0530 Mon, 19 Apr 2010 12:16:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39633 Section 23A(1) applies only when non-distribution of dividend is not justified by losses or by the smallness of profits, assessed on commercial principles from the standpoint of a prudent businessman. Assessable income and commercial profits are not identical, so an amount brought to tax does not automatically become distributable profit. On the company's balance-sheet and profit and loss account, its weak financial position, heavy indebtedness, doubtful recoveries and negligible surplus showed that dividend declaration would have been unreasonable and prejudicial to creditors. Disputed Government dues also supported the directors' decision not to declare dividend, so the provision was not attracted. Case-Laws Income Tax Fri, 03 Aug 1973 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39633