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Deemed Dividend - Sec 2(22)(e)

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Querist : Anonymous

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Querist : Anonymous (Querist)
01 June 2011 Hello friends
Pls see the question below if you can help me out

If a shareholder holding substantial interest in a closely held co. is attracted by the provisions of this Section in the following circumstances.

F.Y. 2010-11

Loan given to the company by shareholder - Rs. 1 crore

Loan repaid by the company - Rs. 50 lakhs

Loan payable by the company - Rs. 50 lakhs

My question is whether Rs. 50 lakhs repaid by the company to the director holding substantial interest attracted by the provisions of Sec 2(22)(e)
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CMA. CS. Sanjay Gupta

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CMA. CS. Sanjay Gupta (Expert)
01 June 2011 Deemed dividend is attracted when the amount is given as loan by the company to the shareholder and not when loan given to the company by shareholder.

For details see below article---

https://www.caclubindia.com/articles/details.asp?mod_id=6121
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CA. RAVIKUMAR

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CA. RAVIKUMAR (Expert)
01 June 2011 Sanjay Gupta sir's opinion is correct
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Querist : Anonymous

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Querist : Anonymous (Querist)
02 June 2011 Sir my question is that is Rs. 50 lakhs repaid by the company attracted by the provisions of Sec 2(22)(e)
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Sunil Kr. Sanganeria

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Sunil Kr. Sanganeria (Expert)
02 June 2011 No. Section 2(22)(e) would not be attracted as company has repaid out of what Co received from the shareholder.
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CMA. CS. Sanjay Gupta

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CMA. CS. Sanjay Gupta (Expert)
02 June 2011 Repayment as mentioned above do not attract sec 2(22(e).
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CA. RAVIKUMAR

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CA. RAVIKUMAR (Expert)
02 June 2011 In your situation Sec 2(22)(e) is not applicable
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