Allowability of such interest u/s 37(1) - interest @ 8% on deferred dividend.

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.... companies are not allowed to declare dividend in excess of 1/3rd of the distributable profits or 12 per cent dividend whichever was less. Under the Companies (Temporary Restriction on Dividends) Amendment Act, 1975. companies are now allowed to declare dividends in excess of such distributable profits provided, however, the payment of such excess dividend will be deferred for a period of two year....

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.... the income chargeable under the head "profits and gains of business or profession". Further, under section 37, the fact that though a liability is a present liability but it is to be performed in future, will make no difference. The said Amendment Act provides that the provision of section 205A of the Companies Act, 1956, shall not apply to any installment of deferred dividend. In view thereof, i....