Section 2(22)(e)

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CA. VIKAS GUPTA (Querist)
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08 December 2009 Hi friends,
one of the director of a private limited company having more than 20% shares also, had imprest from the company for making some expenses for the company. Hence debit balance was shown in the books of the company. Whether the same debit balance should be treated as deemed dividend U/s 2(22)(e) or not?

Thanks

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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08 December 2009 If amount has been withdrawn which can be proved for some expenses of the company then these cannot be construed as advance or loan to a shareholder.

If read the whole section; in the last line of the section; it runs as under:

....., or for the individual benefit, of any such shareholder, to the extent...

It clearly suggests that amount is termed as dividend only when individual benefit is attached.

CA Surendra Rakhecha
Surat