Section 2(22)(e) of Income Tax Act

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 December 2009 Whether deposit given by a private limited company to its director for purchase of flat will be treated as deemed dividend?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
Follow

21 December 2009 Yes, if he is holding 10% or more shareholding in the company. It does not matter for what purpose the loan has been given to him.

CA Gangadhar Mishra

CA Gangadhar Mishra (Expert)
Follow

21 December 2009 mr surendra pl elaborate this, suppose the company has taken a loan and given to directors say same amount or less and the company is a loss company ie. the reserve & surplus is negative (dr bal.), in this case whether sec-2(22)(e) deemed dividend applicable.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
Follow

21 December 2009 No, since the deemed dividend is considered only upto the accumulated profits in the hands of the company.

CA Gangadhar Mishra

CA Gangadhar Mishra (Expert)
Follow

22 December 2009 thank you

Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2009 Surendra Sir,
I have 1 doubt...
If the company has granted deposit to its director, say Mr. A to purchase flat & the same flat is taken on lease by the company from director Mr. A to provide accomodation to the same director Mr. A, can the deposit above will be considered as Deemed dividend u/s 2(22)(e)?

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2010 thanx

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now