Sec. 297 applicability..please provide suggestion

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 July 2013 Our Company is in the field of infrastructure development. Company regularly obtained services relates to construction from proprietor firm, in which our companies director is proprietor. As CS of the Pvt. Ltd. company I am not able to judge whether these service transaction are at prevailing market price to confirm the applicability of Section 297. Presently paid up capital of Company is Rs.6 Crore. Professional friends please provide some suggestion on the matter

Ajay Mishra

Ajay Mishra (Expert)
Follow

12 July 2013 Please check whether, your contract covered under this or not:

Section 297 does not apply to:

1. Giving or taking loans.
2.Contract in respect of immovable property (as it is not 'good' ).{Letter No. 9/4190-CL-X dated 27.03.1990}.
3.Contract between two public Companies.
4.Contract of employment of director or managing or whole time director.[ Circuler No.8/11/75-CL-V dated 27.03.1975]
5.Contract for employment of relative of director.
6.Contract entered into by the company with the dealer on principle to principle basis. [Circuler No. FM 8/297/56-PR dated 02-08-1956]
7. Professional services of the nature given by firms of solicitors and advocates, etc.[circuler No. 8/11/75-CL-V dated 05.06.1975]
8.hiring of office premises on rent as the transaction is in immovable property. [Department Clarification dated 10-09-1990]

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

13 July 2013 Sir, these transactions are not covered under exemption as mentioned in your reply, but I want to know how to judge whether particular transaction of service nature is on the prevailing market price? If there is no other party with which company conducts same nature of transaction, then how judge transaction under Section 297?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now