Meaning of Accumulated Profit - (New) Section 2(40) / (Old) Section 2(22)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... purpose of sub-clause (c) of section 2(40), Accumulate profit shall include all profits of the company up to the date of liquidation, but shall not, where the liquidation is consequent on the compulsory acquisition of its undertaking by the Government or a corporation owned or controlled by the Government under any law in force, include any profits of the company before three successive tax years immediately preceding the tax year in which such acquisition took place; Clause (B) - Accumulated Profits of Amalgamated Company • In respect of an amalgamated company, the accumulated profits, whether capitalised or not, or loss, as the case may be, shall be increased by the accumulated profits, whether capitalised or not, of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ny law for the time being in force, include any profits of the company prior to three successive previous years immediately preceding the previous year in which such acquisition took place. Accumulated Profits of Amalgamated Company Explanation 2A.-In the case of an amalgamated company, the accumulated profits, whether capitalised or not, or loss, as the case may be, shall be increased by the accumulated profits, whether capitalised or not, of the amalgamating company on the date of amalgamation. Meaning of "Concern" "Concern" means a Hindu undivided family, or a firm or an association of persons or a body of individuals or a company ; Meaning of "Substantial Interest" A person shall be deemed to have a substantial interes....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nt invest in the real estate from the accumulated profit such investment can not reduced from accumulated profit for the purpose of determination of deemed dividend. [ Income-tax Officer, Ward-31(2), New Delhi Versus Gurdip Singh 2007 (9) TMI 454 - ITAT DELHI ] • Amounts charged under section 41(2) do not constitute 'accumulated profits' within section 2(22)(c) and therefore are not deemed to be dividend when distributed on liquidation. [ Commissioner of Income-Tax Versus Urmila Rungta, Urmila Ramesh 1998 (1) TMI 2 - Supreme Court ] • Once profits are reflected as balances carried to the balance-sheet (profit and loss balances, general reserves and taxation provisions), they constitute commercial ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts. [ Deputy Commissioner of Income Tax Vs. Rajasthan Wires (P) Ltd. 2003 (2) TMI 175 - ITAT JAIPUR ] • For the purposes of deemed dividend provisions, "accumulated profits" means commercial profits, and a reserve created by setting apart development rebate does not cease to be accumulated profits unless the profits are actually capitalised. The development rebate reserve, when not capitalised and merely transferred to reserve by charging the profit and loss account, retains the character of accumulated profits in the commercial sense and is available to be applied for the purpose of treating advances by a private company to a shareholder as deemed dividend under clause (e) of section 2(6A) of the Income Tax Act, 1922.&nbs....