Where a closely held company gives an loan/advance to a shareholder who has 10% voting power in the company or to concern in which such ‘shareholder has 20% share in case such concern is a non company assessee or has substantial interest (20% voting power) in case it is a company then loan/advance so paid shall be deemed divided to the maximum extent of:
A. accumulated profits whether capitalized or not
B. accumulated profits excluding capitalized profits
C. the loan or advance so paid
D. None of the above
Answer:B
Where a closely held company gives an loan/advance to a shareholder who has 10% voting power in the company or to concern in which such ‘shareholder has 20% share in case such concern is a non company assessee or has substantial interest (20% voting power) in case it is a company then loan/advance so paid shall be deemed divided to the maximum extent of:
A. accumulated profits whether capitalized or not B. accumulated profits excluding capitalized profits C. the loan or advance so paid D. None of the above