Deemed Dividend
This query is : Resolved
dhaval thakkar
(Querist)
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"??????
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
(Expert)
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.
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