Sec.2(22)e

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Mayank (Querist)
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03 November 2010 Hi, Good Morning frnds.

I hv some problems regarding sec 2(22)e to discuss wid u.

Here d same,

(1) Whether debit balance in shareholder's a\c in course of business transaction,who has 10% or more holding in company can be treated as loans or advances given to him and is it taxable under this sec. even if company made a related party disclosure in its books of accounts?

(2)Deemed dividend to the extent of accumulated profit inclusive of dividend distribution tax or not?

e.g. If company has distrubute bonus shares out of its accumulated profit to its Prf. share holder shareholder for rs.60000 and its accumulated profit is Rs.50000. for calculating div.Rs.50000 can be treated as awhole or it can be Rs.50000*100/116.95=Rs.42753/-?

if it is inclusive hw it can be possible becoz DDT is a liability of d company.?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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03 November 2010 1 - business transaction cannot be included in 2(22)(e).
2. for 2(22)(e) there is no liability to pay DDT on the same but to deduct TDS u/s 194. Read 115O fro further details.

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Mayank

Mayank (Querist)
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03 November 2010 Thanks for ur Answer. but my second query is nt abt sec.2(22)e but it is for sec.2(22)a to d. for thses sections there is a provision for DDT hence pls. answer my quary according to these sections.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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04 November 2010 It would be inclusive of DDT. SO the answer above would be 42753

ICSI ICAI ICWAI

ICSI ICAI ICWAI (Expert)
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04 November 2010 42753 will be taken as a whole

Aditya Maheshwari

Aditya Maheshwari (Expert)
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04 November 2010 Yes. U can also refer to a problem like above in singhania.

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