372A
This query is : Resolved
Guest
Guest
(Querist)
28 May 2010
A holding co. is meeting out the expenses of the Subsidiary and debiting to Loans and advances.
It is not a wholly owned subsidiary.
whether it is a loan for the purpose of Section 372A?
Please clarify
It is not a wholly owned subsidiary.
whether it is a loan for the purpose of Section 372A?
Please clarify
28 May 2010
Only loans given to wholly owned susidiary is exempt not otherwise. Hence it is a loan given for the purpose of Section 372A if the holding company is not a private company
Guest
Guest
(Querist)
02 June 2010
The said comapany is Public Ltd.
And Sec 372A is applicable.
In the said case they are maintaining two separate a/c by the following names:
1.Subsdiary-Expenses recoverable
2.Subsidiary-Loan a/c
only for the second one they are charging interest.
So is there a violation of Sec 372A in the first one i.e expenses a/c
And Sec 372A is applicable.
In the said case they are maintaining two separate a/c by the following names:
1.Subsdiary-Expenses recoverable
2.Subsidiary-Loan a/c
only for the second one they are charging interest.
So is there a violation of Sec 372A in the first one i.e expenses a/c
02 June 2010
I think it would be a current account transaction i. e. business transaction and no a loan transaction and hence it should not be violative of Section 372A.
If the limit as specified in the section is being crossed then you can pass a resolution in the general meeting for granting loans in excess of the limits specified so that u do not face any problem in future if u cross the limit.
If the limit as specified in the section is being crossed then you can pass a resolution in the general meeting for granting loans in excess of the limits specified so that u do not face any problem in future if u cross the limit.
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