https://www.taxtmi.com/caselaws?id=244942 A loan or advance by a closely held company to its director may escape deemed dividend treatment only if lending of money is shown to be a substantial part of the company's business and the advance is made in the ordinary course of that business. On the stated facts, the company had no money-lending licence, no supporting income from lending activity was shown, and the record did not establish that lending formed a substantial part of its business. The exception in section 2(22)(e) of the Income-tax Act, 1961 was therefore not attracted, and the unsecured loan was correctly treated as deemed dividend to the extent of accumulated profits. en-us Mon, 10 Mar 2014 00:00:00 +0530 Thu, 05 Jun 2014 11:52:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=244942 A loan or advance by a closely held company to its director may escape deemed dividend treatment only if lending of money is shown to be a substantial part of the company's business and the advance is made in the ordinary course of that business. On the stated facts, the company had no money-lending licence, no supporting income from lending activity was shown, and the record did not establish that lending formed a substantial part of its business. The exception in section 2(22)(e) of the Income-tax Act, 1961 was therefore not attracted, and the unsecured loan was correctly treated as deemed dividend to the extent of accumulated profits. Case-Laws Income Tax Mon, 10 Mar 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=244942