deemed dividend in case of loan given to pvt ltd company

This query is : Resolved

ANAND AGRAWAL (Querist)
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28 August 2008 hi
this relates to loan given by a private limited company to another private limited company.in my query there are there are three private limited companies ; A,B.C

'A' COMPANY HOLDS MORE THAN 10% SHARES IN SHARE CAPITAL OF B COMPANY.

'A' COMPANY ALSO HOLD MORE THAN 205 SHARE IN THE SHARE CAPITAL OF 'C' COMPANY .

'B' COMPANY GIVES THE LOAN TO 'C' COMPANY.

PL GUIDE WHETHER LOAN GIVEN BY 'B' COMPANY TO 'C' COMPANY WILL BE TREATED A DEEMDED DIVIDEND U/S 2(22)(e)of the income tax.

my doubt is about the word 'HE' in the latter part of section 2(22)(e) in the following para

" or to any concern in which such shareholder is a member or a partner and in which 'HE' has a substantial interest ( hereafter in this clause referred to as the said concern,

in the above, the word is 'HE' it means section 2(22)(e) may be applicable where in other concern, only individual has the substantial interrest either as sharehodler or partner.

pl advise me at your earliest.
regards
anand agrawal

CMA Jitendra Singh

CMA Jitendra Singh (Expert)
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06 September 2008 Hi Anand,

You written 205 shares please clear whether it is more than 10% or not to decide the matter

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