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deemed dividend

This query is : Resolved 
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(Querist)
30 January 2010 Any loan/advance by ABC P. Ltd. to a person who has substantial interest (10% holding) in ABC is deemed dividend. Is this correct?

Also any loan/advance to a concern of which this person is a member or a partner having substantial interest is deemed dividend.

What if loan/advance is given by ABC to a company where this person is merely a director (without any substantial interest)? Is it still deemed to be dividend?

Please help.
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CMA. Dinesh S Adhikari, ACMA

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CMA. Dinesh S Adhikari, ACMA (Expert)
01 February 2010 First is Correct, it will be Deemed dividend u/s 2(22)(e).

Second is also correct under same section.

Third: It is given that in that case Certain shareholder should be having Substantial Interest[sec 2(34)] any any time during the pervious year, but if that person is merely director then deemed dividend section will not be applicable here.


Regards!!!
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Sneha

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Sneha (Querist)
01 February 2010 Thanks a lot!
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