Deemed dividend issue

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Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2013 I am asking an query by an example.

If company A gives loan to company B which is also shareholder of company A (voting power is more than 10%). And another shareholder of company A is also shareholder of company B (voting power is more than 10%). Then on whom tax liability of deemed dividend generates ? whether it is only on company B or also on another shareholder ?

S Sivasalapathy

S Sivasalapathy (Expert)
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11 February 2013 Sec 2 (22)e attracts Company B & another shareholder. Another shareholder of Co A is also shareholder of co B is immeterial.

Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2013 Company A is given loan to company B therefore company B is liable to deemed dividend and if another shareholder is not shareholder in company B then he is not liable for deemed dividend. In this case another shareholder is also shareholder in company B that why he is liable for deemed dividend. Can you please suggest at what quantum company B and another shareholder liable for deemed dividend.

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