nitin suvarna (C.A FINAL) (828 Points)
19 March 2012hello friends,
my query is regarding the scope of deemed dividend & its applicability ,it basically applies to closely held cos.(so pvt ltd & unlisted public ltd cos will be covered) & accordingly the loans advanced by the co to the shareholders as well as exps which is personal in nature deducted as cos exps should be considered as deemed dividend u/s 2 (22 )e . i need a confirmation from u friends & also share ur experiences in this regard ......
regards,
nitin s
bcshettyco
(Chartered Accountant In Practice)
(65 Points)
Replied 20 March 2012
In order to treat it as deemed dividend u/s 2(22)(e), the shareholder must be registered shareholder & he should be holding more than 10percent of shares. However the personal expenses of the shareholders cannot be treated as deemed dividend & it is disallowed under section 37. If the expenses are for the official purpose the same will be allowed.
nitin suvarna
(C.A FINAL)
(828 Points)
Replied 21 March 2012
sir thx, for the reply .i have read that personal exps of such shareholders too will be considered as deemed dividend if considered in co's books as exps....
CAclubindia
