section 2(22)(e)

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Moiz (Querist)
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08 October 2009 If a subsidiary company gives loan to holding company then in what circumstances is it a deemed dividend

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08 October 2009 Whenever any payment is made by way of loan or advance, the recipient of the loan or advance will be liable to be taxed on this amount as a dividend, to the extent to which the company has accumulated profits, under the deeming provisions of section 2(22) (e) although such loan or advance may have been given for genuine business purposes and even if the paying company may have received back the loan amount. Profits means commercial profits only.