(40(a)(ii)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2012 Case 1:-
Mr. A is Director of A Ltd. & B Ltd.

A Ltd. Purchased Goods From B Ltd.
is it covered in 40 A 2 of IT Act.

Case 2:-
Mr. A is Director of A Ltd.
Mr. A's Relative is Director in B Ltd.

A ltd. Purchased Goods From B Ltd.
It This Covered.??

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2012 Also Suggest Under AS-18 Companies Act.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 August 2012 The answer lies in the definition of relative as provided in Section 40A(2)(b)(vi).

Case 1
If Mr. A has a substantial interest in B Ltd, then B Ltd is related person for A Ltd. and Section 40A(2) shall be attracted.

Case 2
If relative of Mr. A has a substantial interest in B Ltd. then B Ltd. is related person for A Ltd. and Section 40A(2) shall be attracted.

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2012 Not Subtantial Interest, Only Directorship

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 August 2012 If there is no substantial interest then Section 40A(2) is NOT attracted.

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