https://www.taxtmi.com/caselaws?id=8167 An advance or loan by a closely held company to a shareholder is treated as deemed dividend under section 2(6A)(e) of the Indian Income-tax Act, 1922 when the loan is advanced, to the extent of accumulated profits. Repayment before the close of the previous year does not undo the statutory character already attached to the payment, because the taxable event arises on receipt of the advance and not on year-end balancing. Section 16(2) governs inclusion and grossing up of dividend income, while section 12(2) does not allow deduction of repayment of principal to neutralise the deemed dividend. en-us Fri, 19 Feb 1971 00:00:00 +0530 Tue, 31 Mar 2009 17:41:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8167 An advance or loan by a closely held company to a shareholder is treated as deemed dividend under section 2(6A)(e) of the Indian Income-tax Act, 1922 when the loan is advanced, to the extent of accumulated profits. Repayment before the close of the previous year does not undo the statutory character already attached to the payment, because the taxable event arises on receipt of the advance and not on year-end balancing. Section 16(2) governs inclusion and grossing up of dividend income, while section 12(2) does not allow deduction of repayment of principal to neutralise the deemed dividend. Case-Laws Income Tax Fri, 19 Feb 1971 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8167