1996 (2) TMI 47 - HC - Income Tax

Summary

The High Court of Madras, in response to a reference from the Tribunal, ruled that a general reserve should not be reduced by future dividend declarations for computing capital base under the Companies (Profits) Surtax Act, 1964. The decision was influenced by a similar Supreme Court case involving appropriation of dividends from reserves. The court decided in favor of the Department based on the Supreme Court's ruling.