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deemed dividend

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43 Points Posted on 08 January 2019
when a company A gives loan to company B and company B is a stake holder of more than 10% in company A. can this loan be termed as deemed dividend u/s 2 22 e in the hands of B. urgent reply is solicited....thanks in advance
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On 08 January 2019 at 12:36 Report
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intermediate
216 Points Posted on 09 January 2019
Deemed dividend provisions are applicable only to closely held companies (i.e., companies in which public are not substantially interested).

So please ensure that the same is not public company before treating the same is deemed dividend.
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On 09 January 2019 at 00:01
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43 Points Posted on 09 January 2019
yes company B is a private company
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On 09 January 2019 at 10:20
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Partner at Bhat Momaya & Associates
2319 Points Posted on 09 January 2019

The reserves of Company A as on the date of grant of loan has also to be taken into account before treating the same as deemed dividend u/s 2(22)(e)

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On 09 January 2019 at 10:43


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