05 November 2009
i have a query on sec 2 22 e the company had given loan to shareholder, it has accumulated profits, however at the time of loan the holding was less than 10%, subsequently during the year holding increases above 10%. does the loan becomes deemed dividend to the shareholder? if not is there any case law to support?
08 November 2009
To attract the provisions of section 2(22)(e),the share holder must hold not less than 10% of the voting power and should have beneficial ownership also in the shares at the time of accepting the loan.
CAclubindia
