https://www.taxtmi.com/caselaws?id=39817 Realised capital gains from the sale of capital assets may be treated as commercial profits available for dividend under section 23A of the Indian Income-tax Act, 1922, unless the company's memorandum or articles prohibit such distribution or payment would impair paid-up capital. The test is commercial principles read with the company's constitution, and realised accretions are not excluded from distributable profits merely because they arose from capital assets. On the stated facts, there was no constitutional bar and dividend declaration would not reduce capital, so the realised gain counted as profit for assessing whether non-declaration of dividend was justified. en-us Thu, 11 Jul 1974 00:00:00 +0530 Tue, 20 Apr 2010 13:52:14 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39817 Realised capital gains from the sale of capital assets may be treated as commercial profits available for dividend under section 23A of the Indian Income-tax Act, 1922, unless the company's memorandum or articles prohibit such distribution or payment would impair paid-up capital. The test is commercial principles read with the company's constitution, and realised accretions are not excluded from distributable profits merely because they arose from capital assets. On the stated facts, there was no constitutional bar and dividend declaration would not reduce capital, so the realised gain counted as profit for assessing whether non-declaration of dividend was justified. Case-Laws Income Tax Thu, 11 Jul 1974 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39817