During the year ended 31st March 2016, a closely held public limited company has arrived at a Net Profit of Rs.6.00 crores. The company was operating from a leased land. The owner of the land had forced the company to vacate the land. For vacating the land the company during year ended 31.03.2016 had received an amount of Rs.5.00 crore as one time compensation from the owner of the land. The said 5.00 crores received is being disclosed in the statement of profit & loss as an execeptional income.
My query is whether the company has to comply with the provisions of Section 135 (corporate social responsibility) for year ended 31.03.2016, since the net profit is more than Rs.5.00 crores. I request the forum members to clarify.
30 May 2016
According to Section 135 of Companies Act 2013, Net profit shall be Computed as per the provisions of Section 198 of Companies Act 2013, but as per section 198 (2) of the Companies Act 2013, credit shall not be given from the sale of immovable property or fixed assets of a Capital nature comprised in undertaking or any of the undertakings of the Company, unless the business of the Company consist weather wholly or partlyof buying and selling any such property or assets. So, Such a profit shall not be counted. Please Correct me if Wrong.
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