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deemed dividend

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(Querist)
05 November 2009 i have a query on sec 2 22 e the company had given loan to shareholder, it has accumulated profits, however at the time of loan the holding was less than 10%, subsequently during the year holding increases above 10%. does the loan becomes deemed dividend to the shareholder? if not is there any case law to support?
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M Prabhakar Menon

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M Prabhakar Menon (Expert)
06 November 2009 The Shareholding during the previous year in question is important any subsequent or earlier holding is not material
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
08 November 2009 To attract the provisions of section 2(22)(e),the share holder must hold not less than 10% of the voting power and should have beneficial ownership also in the shares at the time of accepting the loan.
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