Deemed Dividend

This query is : Resolved

dhaval thakkar (Querist)
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07 January 2011 Facts :
1. Closely held company
2. SHD giving money to the company
3. SHD holding more then 10% of shares in the company
4. Interest payment by the company to the SHD
5. Company possess accumulated profits

Query :
will the interest received by the SHD be treated as deemed dividend??

Interpretation of the words "advance or loan"??????

Aditya Maheshwari

Aditya Maheshwari (Expert)
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07 January 2011 2(22)(e) is aplicable if company has advanced funds to the SHD and not vice versa. Interest received by SHD will be normal interest income only.