will Sec 2(22)(e) get attracted

In my opinion, Sec 2(22)(e) would not b attracted... because there is no instance of loan given by the company to its shareholders or to M/S X..

V Ltd is simply assigning its Debtors (M/S X) to A Ltd..

M/S X is not a Company... so no deemed dividend should arise in the case

Dear Amitkk

thank you for ur response,Even i feel the same way as u feel, my senior feels that there could be a chance or the Dept telling that there is deemed dividend because of the following ,

Sec 2(22)(e) says any distrubution entailing the release of company's assets- now here X Ltd has a debit balance of V Ltd, and this gets realeased by this act done, and the partners being shareholders receive the amount as loan, X Ltd has accumulated profits of Rs 5.5 crores

I argued the same way u said, that teere is no payment made by the company, still he has doubts

is there any case law similar to this which we can use, this is real situation of one of our client

regards

karthi

dear every one

will any one enlighten me on the above doubt i have put

karthi

since the company A Ltd. is not giving a loan either to the substantial interest holder,i.e the shareholders,or the firm M/s X ....so, there is no question of deemed dividend u/s 2(22)(e)