Deemed div. u/s 2(22)(e) ?

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CA Sahil Singla.. (Querist)
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01 May 2012 Sir

Suppose co. has Rs 200000 as accumulated profits. It has given loan to Mr. X of Rs. 200000 taxable as deemed dividend u/s 2(22)(e). AFter some time this load was repaid to Co. by Mr. X. Now co. gives loan to another shareholder Mr. B of Rs. 100000.
Please tell me whether Rs. 100000 is deemed dividend ? I mean to say whether repayment of Loan by Mr. X to be considered while taxing Deemed dividend in hands of B ?

sumit jain

sumit jain (Expert)
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01 May 2012 since 200000 has already been taken as deemed dividend, the limit if accumulated profit is exhausted.. hence subsequent loan to shareholder cannot be treated as deemed dividend even though all other conditions of 2(22)e are satisfied

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