05 July 2012
Mr X has purchased a flat in his name. He has also obtained a loan in his name for this purchase. Mr X is holding 60 % in his company Mr X Ltd. The payment of loan is being made by company only. As a result deemed dividend u/s 2(22)e is attracted. To avoid this, can we show that the company has purchased the flat , and it is held in the name of shareholder ?
We will disclose this fact in the notes. We will treat this as an investment and not claim depreciation u/s 32. Kindly advice
08 July 2012
When flat is purchased in the name of X and Housing loan is also obtained by Mr X. and Registration of documents with Sub-Registrar also indicates that Mr. X is owner of Property.
So in my opinion you cannot show Flat in the name of company.
If you show as an Investment it will be only a window dressing.
09 July 2012
Yes , it would be window dressing, but cant we apply the concept of beneficial ownership? We would pass a board resolution regarding the matter. At times the shares in other companies are held in the personal capacity of the directors of the original company, by applying the concept of beneficial ownership.?
CAclubindia
