disbursement loan taken by private company

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shruti (Querist)
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31 March 2011 'A' private company has taken a loan of Rs.10 crs. The co. wants to distribute the loan to 3 private cos. comprising almost same directors and 3 partenership firms. Please suggest in which form the loan taken by co.A should be given to the said mentioned companies and firms? Urgent..

Rasesh

Rasesh (Expert)
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01 April 2011 You may be covered by Sec 2(22)(e) - Deemed Dividend of the Income Tax Act.

A way out is give subscription money for preference shares and later on when the purpose is satisfied, get the money back.

If the money is not going to come back, then issue OFCD at lower rate and long tenure.

Take care about the valuation of there companies before doing any transaction.