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Deemed dividend
Pvt ltd co has paid 75 lacs to the shareholder having 13%interest. Now any way to avoid 2(22)e??
Replies (8)
yes.
it is deemed dividend but to the extent accumulated profits
so please let me know the accumulated profits of the company
it is deemed dividend but to the extent accumulated profits
so please let me know the accumulated profits of the company
70cr way greater than the loan amount
Accumulated profits are more than Loan amount hence total loan amount will treat as deemed dividend as per Section 2(22)(e)
But i am asking any way to avoid it??
if u can prove that loan is given for commercial expediency...there are case laws which justifies that loan given in commercial expediency will not attract deemed dividend provisions.
Commercial expendiency means in the course of business??
Yes in the course of business..
Thanks
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