Applicability of provisions of section 2(22)(e)

This query is : Resolved

yogesh vijaykumar shah (Querist)
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22 May 2011 Company X Pvt.Ltd having following shareholding pattern :-

Share holder % of holding
A 50.50
B 10.00
C 4.00
others 35.50

Company Y Pvt Ltd having following shareholding pattern
Share holder % of holding
A 94.00
B 2
C 2
others 2

If the Company X Pvt Ltd invest Inter company deposit (ICD) in Company Y Pvt Ltd. Whether deposit given to Y Company Pvt Ltd attracts the provision of section 2(22)(e) relating to deemed dividend i.e. whether deemed dividend taxable in the hands of Y Company Ltd. If yes, the company X do not deduct TDS on deemed dividend what are the consequences? Please advise with justification.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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22 May 2011 https://www.caclubindia.com/experts/deemed-dividend-659360.asp

Please see above link. Similar query has been resolved. In the given case provisions of deemed dividend u/s 2(22)(e) will not be attracted.

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