C. I. T. (CENTRAL) CALCUTTA vs ASIATIC TEXTILE LTD.

The Supreme Court addressed the interpretation of Section 23A(1) of the Indian Income Tax Act, 1922, determining that the Income Tax Appellate Tribunal's disallowance of a capital loss of Rs. 12,00,000 due to depreciation in share value was unjustified. The Court held that the absence of commercial profits made it unreasonable to expect the company to declare dividends, thus upholding the Assistant Commissioner's cancellation of additional super-tax levied by the Income-tax Officer. The judgment clarified the conditions under which dividends may be declared in light of capital losses.