Providing for proposed dividend in profit and loss account and showing the same under the head “Current liabilities and provisions” in balance sheet Whether statutory obligation breach of which invites prosecution

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....proposed dividend in profit and loss account and showing the same under the head "Current liabilities and provisions" in balance sheet ‑ Whether statutory obligation breach of which invites prosecution The Department agrees that the dividend becomes a liability only when it is approved by the shareholders at the annual general meeting. It may, however, be appreciated that the payment of div....

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....idend exceeding 10 per cent; and * Provisions of section 217(1)(c). In view of the above facts, the Department is of the firm view that there is a statutory obligation on the part of the companies to provide for proposed dividend in their profit and loss accounts and show the same under the head "Current liabilities and provisions" in the balance sheet. The failure to make such provisions in th....