Section 297

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2012 Please let me know the applicability of Section 297 in this particular case as mentioned below:

X,Y & Z are director in XYZ Ltd as well as in ABC ltd.

(1)If XYZ Ltd purchase some goods from ABC Ltd on credit on regular basis & make payment through cash & cheque.

(2)If XYZ Ltd purchase some goods from ABC Ltd on credit on regular basis & make payment through cash & cheque at the prevalling market rates.

(3)If XYZ Ltd purchase some goods from ABC Ltd on credit on regular basis & make payment through cash & cheque at the prevalling market prices. The amount of contract is of Rs. 3 crores approx.

Waiting for your early response.

Thanx
Regards
Shyam Gupta

Ajay Mishra

Ajay Mishra (Expert)

30 May 2012 Hi

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]

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