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deemed Dividend u/s 2(22)e

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RAHUL LOHIYA (Querist)
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23 September 2010 Dear Friends,
please help me on the following query mentioned below.
1) During the F.y 08-09 there is a deemed dividend amounted to Rs 500000 against which the same amount of reserves & surplus are utilized.
As it is considered as a deemed dividend no accounting entry relating to this was passed in the books & hence the same amount of reserves & surplus is carried during the current year.
During the current Year The company had a loss amounted to Rs 7,00,000.
so please suggest me whether the current year loss amounted to Rs. 700000 can be set-off against the opening bal of reserves & surplus........which was already utilized for the purpose of deemed dividend

CA Punit

CA Punit (Expert)
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23 September 2010 Deemed dividend is a concept under Income Tax & not Companies Act.
Reserves & Surplus will remain unaffected.

however amount given as loan or advance to the shareholder (considered as deemed div)should have been accounted in the books.

other opinions appreciated

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