The Assessee had taken loan from two companies.  Assessing Officer treated said loan amount as deemed dividend under section 2(22)(e) in hands of assessee.  Assessee contended that deemed dividend would be attracted where profit was accumulated in immediately preceding year and current year profit accumulation would not attract deemed dividend and since there was no profit accumulation in case of both entities for preceding year, provision of deemed dividend was not applicable. Held that both companies were not companies in which public was substantially interested and the  assessee was holding more than 10 per cent shares in both companies. Payment for purpose of section 2(22)(e) should be made to extent to which company possesses accumulated profits and as per provision of Explanation 2 all profits of company up to date of distribution or payment under section 2(22)(e) were to be considered as accumulated profits, therefore, Assessing Officer was justified in treating loan amount received by assessee as deemed dividend. (AY. 2012-13)