A private limited company engaged in manufacturing activity had general reserve of ₹20 lakh. It granted a loan of ₹5 lakh to a director who held 13% shareholding cum voting rights in the company. The said loan was re-pai

Official answer key: (C). Official source note: A private limited company engaged in manufacturing activity had general reserve of ₹ 20 lakh. It granted a loan of ₹ 5 lakh to a director who held 13% shareholding cum voting rights in the company. The said loan was re-paid by him before the end of the year. The amount of deemed dividend arising out of the above transaction is — (A) ₹ 2,60,000 (B) ₹ 2,40,000 (C) ₹ 5,00,000 (D) Nil.