30 January 2010
Any loan/advance by ABC P. Ltd. to a person who has substantial interest (10% holding) in ABC is deemed dividend. Is this correct?
Also any loan/advance to a concern of which this person is a member or a partner having substantial interest is deemed dividend.
What if loan/advance is given by ABC to a company where this person is merely a director (without any substantial interest)? Is it still deemed to be dividend?
01 February 2010
First is Correct, it will be Deemed dividend u/s 2(22)(e).
Second is also correct under same section.
Third: It is given that in that case Certain shareholder should be having Substantial Interest[sec 2(34)] any any time during the pervious year, but if that person is merely director then deemed dividend section will not be applicable here.
CAclubindia
