Deemed dividend provisions not applicable to loan made in ordinary course of business

CA, CS Pawan Sehrawat Trade advance which are in the nature of money transacted to give effect to commercial transaction would not fall within the ambit of the provisions of section 2(22)(e). As per section 2(22)(e) of IT Act, Deemed dividend (to extent of accumulated profit) includes, Any payment by way of loan or advance by a closely-held company to a shareholder holding substantial interest. Such deemded dividend is treated as Income From Other Sources (IFOS) in the hand of such shareholder. Unless the loan made in the ordinary course of business and money-lending is substantial part of th...