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2(22)(e)

This query is : Resolved 
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(Querist)
22 December 2010 Mr. D is 20% Beneficial share holder of U Ltd.(Closely Held Co.)
as well 15% Beneficial share holder of P Pvt.Ltd.(Closely Held Co.)
U ltd holds 40% Share holding in P Pvt. Ltd.

Now If P Pvt. Ltd. Receive Loan and advances(suppose U ltd has sufficient accumulated profit) from U Ltd.

While calculating substantial interest:
Direct holding of Mr. D in P pvt. ltd is 15%
Holding through U ltd 40%*20%= 8% so total holding = 15+ 8 = 23%

Is this calculation is valid.
Please quote case law if any.
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CA. R. B. SAH

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CA. R. B. SAH (Expert)
22 December 2010 calculation is not valid.
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CA ASHISH GUPTA

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CA ASHISH GUPTA (Expert)
22 December 2010 Not valid.
No case law required.
Law is very clear.
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Dipendra

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Dipendra (Querist)
23 December 2010 How can we say that indirect holding can't be added while calculating Substantioal interest? Since law is silent. Would you elaborate please.
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