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shareholders. Income of the company is computed and assessed separately in the hands of the company. However
the income of the company which is distributed to its shareholders as dividend is assessed in their individual hands.
Such distribution of income is not treated as expenditure in the hands of company, the income so distributed is an
appropriation of the profits of the company.
To wipe out the ambiguity on adjustments relating to tax entries in the profit and loss account, it is proposed that the
"book profits" be increased by an amount of DDT paid, amount of deferred tax paid and deferred tax provision
debited to Profit and Loss Account.