What is Meaning of Accumulated Profit Used in Sec. 2(22) of The Income Tax Act ?

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The definition of word Dividend is provided under section 2(22) of the Income Tax Act which includes the word “accumulated profits” . However , the word “accumulated profits” of a company is itself not defined under Income Tax Act. So, if one desire to know whether a distribution or payment by a company falls under the definition of “dividend” as given u/s 2(22) , one needs to understand the meaning of word “accumulated profit” .Since the meaning is not provided under the I.T.Act , one will have to follow the meaning assigned by various courts including Supreme Court of India .

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