18 March 2010
There is a limit,to the extend of accumulated profits of the company subject to the satisfaction of other conditions, as rightly said by Rasesh sir,as in section 2(22)(e) of the Income tax Act,1961.
18 March 2010
AGREE WITH EXPERTS. BUT IF THE COMPANY IS A NBFC AND MORE THAN 20% OF ITS INCOME IS FROM INTEREST RECEIVED ON LOAN GIVEN AND THE COMPANY HAS CHARGED INTEREST ON LOAN GIVEN TO DIRECTOR THEN SEC 2(22)(e) WILL NOT BE ATTRACTED. YOU ALSO HAVE TO LOOK AT THE SHAREHOLDING OF DIRECTOR IF IT IS LESS THAN 10% 2(22)(e) WILL NOT BE ATTRACTED.
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