COMMISSIONER OF INCOME-TAX, GUJARAT vs GIRDHARDAS & COMPANY PRIVATE LTD.

The Supreme Court interpreted Section 2(6A)(c) of the Indian Income-tax Act, 1922, clarifying that distributions made by a liquidator during company liquidation must be analyzed to determine the portion attributable to accumulated profits, which is taxable as dividend. The Court held that the distribution should be disaggregated into capital and accumulated profits based on their proportions at the time of liquidation. The High Court's ruling that no part of the distribution could be considered dividend was overturned, affirming that the amount attributable to accumulated profits is taxable under the Act.