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Sudhir Chatterjee & Co. (P.) Ltd. vs Commissioner Of Income-Tax on 8 November, 1973 cites

Commissioner Of Income-Tax, West ... vs Gungadhar Banerjee And Co. (P) Ltd on 22 March, 1965

"Whether in a particular year dividend should be declared or not is a matter primarily for the directors of a company. The Income-tax Officer can step in under Section 23A(1) only if the directors unjustifiably refrain from declaring dividend. If the directors of a company had reasonable grounds for not declaring any dividend, it is not open for the Income-tax Officer to constitute himself as a super director. As observed by this court in Commissioner of Income-tax v. Gangadhar Banerjee and Co. (P.) Ltd. , the Income-tax Officer, in considering whether the payment of a dividend or a larger dividend than that declared by a company would be unreasonable within the meaning of Section 23A of the Act does not assess any income to tax. He only does what the directors should have done putting himself in their place. Though the object of the section is to prevent evasion of tax, the provision must be worked not from the standpoint of the tax collector but from that of a businessman. The reasonableness or unreasonableness of the amount distributed as dividends is judged by business considerations, such as the previous losses, the present profits, the availability, of surplus money and the reasonable requirements of the future and similar others. The Income-tax Officer must take an overall picture of the financial position of the business. He should put himself in the position of a prudent businessman or the director of a company and deal with the problem with a sympathetic and objective approach."
Supreme Court of India Cites 8 - Cited by 165 - Full Document

Commissioner Of Income-Tax, Uttar ... vs A. Tellery And Sons Pvt. Ltd. on 4 October, 1966

In the case of Commissioner of Income-tax v. A. Tellery and Sons (P.) Ltd. [1967] 63 ITR 288, the Supreme Court, while considering the question whether a finding that a particular expenditure is deductible as business expenditure under Section 10(2)(xv) on the facts found is a finding of fact or not, held that such a finding would not be a finding of fact and was a finding of mixed question of law and fact. The Supreme Court observed at pages 291-292 :
Supreme Court of India Cites 7 - Cited by 16 - J C Shah - Full Document

Commissioner Of Income-Tax, Bombay ... vs Greaves Cotton And Co. Ltd. on 4 May, 1967

20. The same principles have been reiterated by the Supreme Court in the case of Commissioner of Income-tax v. Greaves Cotton and Co. Ltd. and observations more or less identical to the observations already quoted, have been made by the Supreme Court at page 207. In our opinion, for consideration of the applicability of Section 23A it is undoubtedly necessary to ascertain various basic facts. Upon ascertainment of the basic facts it becomes necessary to apply the correct principles of law to the facts found and application of the correct principles involves proper construction and interpretation of the scope and effect of Section 23A. As application of the correct principles of law to the facts found is imperative for attracting and applying the provisions of Section 23A in each and every case. We are, therefore, of the opinion that the finding is not a pure finding of fact and raises a mixed question of law and fact. It is a finding of fact in so far as it relates to the findings of the basic materials, namely, (1) income assessed, (2) tax payable, (3) declaration of dividend, (4) loss brought forward, and (5) commercial profit in the relevant year. Further question as to whether Section 23A can be properly applied on the basis of the facts found involves consideration and proper application of principles of law and interpretation of the scope and meaning of Section 23A.
Supreme Court of India Cites 8 - Cited by 104 - Full Document

E. D. Sassoon And Company Ltd vs The Commissioner Of Income-Tax,Bombay ... on 14 May, 1954

It is the contention of Mr. Pal that taking into consideration the fact that the company had suffered losses in the two previous years it cannot be said to be unreasonable that the board of directors of the company as prudent businessmen considered it to be reasonable not to declare the entire amount of commercial profits by way of dividend and to declare and distribute the said sum of Rs. 12,000 as dividend leaving a small surplus of about Rs. 8,000 for the company and its business. Mr. Pal contends that it was essential for the board of directors to decide in the interest of the company what sum should be declared as dividend and it was the duty of the Income-tax Officer to approach and consider the entire problem not from the viewpoint of a tax collector but from the viewpoint of a prudent businessman. Mr. Pal has argued that normally no company would declare and distribute its entire commercial profits by way of dividend without leaving something for the company. Mr. Pal contends that, applying the principles laid down by the Supreme Court in the cases which we have mentioned earlier and taking into consideration the decision of the Division Bench of this court in the case already mentioned, it cannot be said that the declaration of the sum of Rs. 12,000 as dividend was unreasonable and a larger amount should have been declared as dividend. Mr. Pal has further submitted that the question as to what amount should be declared as dividend in the facts and circumstances of a particular case is not a question of fact and is undoubtedly a mixed question of fact and law.
Supreme Court of India Cites 31 - Cited by 1764 - N H Bhagwati - Full Document
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