https://www.taxtmi.com/caselaws?id=168791 Loans or advances by a closely held company may be treated as deemed dividend where the shareholder stands in the position of debtor to the company, and a cash receipt is not essential if payment in law has occurred through assumption of liability. The provision operates retrospectively, but taxability is limited to the company's accumulated profits at the time the relevant liability is undertaken. On the stated facts, the heirs became personally liable for the deceased shareholder's debt, so the decisive date for computing accumulated profits was when each heir assumed that liability, not when the original loan was advanced. en-us Fri, 02 Mar 1962 00:00:00 +0530 Thu, 26 Mar 2015 16:41:42 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=168791 Loans or advances by a closely held company may be treated as deemed dividend where the shareholder stands in the position of debtor to the company, and a cash receipt is not essential if payment in law has occurred through assumption of liability. The provision operates retrospectively, but taxability is limited to the company's accumulated profits at the time the relevant liability is undertaken. On the stated facts, the heirs became personally liable for the deceased shareholder's debt, so the decisive date for computing accumulated profits was when each heir assumed that liability, not when the original loan was advanced. Case-Laws Income Tax Fri, 02 Mar 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=168791