cross holding by a pvt ltd company same director
This query is : Resolved
11 August 2010
Sir
Two pvt ltd company having investments in each other and a common director holding more than 10% share in each company .
is this applicable according to corporate law,how or any other law ,like payment made to companies can be treated as deemed dividend.u/s 22 of IT act.
what are the conditions and consequences of this cross holding?
Two pvt ltd company having investments in each other and a common director holding more than 10% share in each company .
is this applicable according to corporate law,how or any other law ,like payment made to companies can be treated as deemed dividend.u/s 22 of IT act.
what are the conditions and consequences of this cross holding?
11 August 2010
If a company lends money to a shareholder holding more than 10% of the share capital then provisions of Section 2(22)(e) of the income tax act applies and it will taxable in the hands of the receiving company as deemed dividend.
There is no such restriction as per companies act since both are pvt. ltd. company.
There is no such restriction as per companies act since both are pvt. ltd. company.
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