Deemed dividend

SHOW IS AS SALE OF SHARES

ABHASH

Under Sec- 2 (22) (e), dividend includes any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern)] or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits.

If private company A pays Rs.4.00 crores to another private company B as loan, Sec-2(22)(e) will be attracted only if any of the conditions mentioned above is attracted and that to the extent of accumulated profits of Company A.