Section 123 Declaration of dividend

#123 Declaration of Dividend
Proviso
 "Provided also that no company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year.".

Sir if co. t/f profits in reserve in 17-18, co. had losses in 18-19 and co didn't declare dividend in that yr. And in 19-20 also co.had losses and in this yr co. wants to declare dividend.

Proviso says that previous yr losses are to be set off against c.y. profits not free reserves c/f.
so can co. declare dividend in 19-20 subject to provisions of Rule 3 and can ignore this proviso?
Replies (1)
See, If you interpret proviso, It separates special case from previous enactment to restrict,/expand / additional to previous clause of enactment, Proviso can't defeat the provison of enactment or clause itself, If it's, Proviso shall be ignored, With plain reading of proviso, If company want to declare dividend then first it should set off p. y. losses and unabsorbed depreciation from c. y. profits ( In case when c. y.company has profits,In this case company has losses from 2 years) ,So it can withdraw about 10% from FR with condition of 15% of p/up cap in FR and ROD not exceeding average rate declared in 3 P. Y., even in this case that withdraw amount should be first utilised for Absorbing Previous losses and Unabsorbed depreciation and balance amount will be distributed among shareholders...

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