Hi,
A loss making company having accumulated losses paid a sum of Rs. 50 Lakhs to his wholly owned holding company. Can anybody tell what would be the accounting treatment for the same and its tax implications.
Regards
Rashi Goyal
1 Replies
MD
(AAA)
(117 Points)
Replied 05 April 2011
Accounting treatment and tax implications will depend on the nature of transaction for which the holding company has received Rs. 50 lakhs.
If your query is relating to deemed dividend then the provisions of section 2(22) of Income-tax Act, are not applicable as the payment is paid from accumulated losses.
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