Section 372a
This query is : Resolved
22 October 2013
A Company has passed a resolution to invest in mutual fund u/s 372A for Rs.2 crore. now the company has invested whole 2 crore in MF, now the company has received Rs. 20 lakh dividend on this MF and the same is re-invested by the company. so my query is that the company violating the section by investing Rs. 2.20 Crore where the resolution is passed for only Rs. 2 crore.
Thanks
Thanks
22 October 2013
Yes, as per resolution passed under section 372A, your limit is specified for this purpose. If you exceed the limit including the current investment with investment made earlier then other resolution will be required.
Message likes :
1 times
22 October 2013
thank you ajay sir for your reply,
but i have one more query that the dividend earned is a revenue income where as the resolution is passed for capital expenditure, so is it right to say that it is crossing the limit ???
thanks
but i have one more query that the dividend earned is a revenue income where as the resolution is passed for capital expenditure, so is it right to say that it is crossing the limit ???
thanks
22 October 2013
Companies Law is not talking about law factor, it only impose on limit to invest.
Message likes :
1 times
22 October 2013
So sir according to you what should be the final conclusion of this, & is there any relevant case law available for this situation.?
Thanks
Thanks
22 October 2013
Please check your shareholder/Board Resolution about the limit of investment.
If such dividend money which is going to invest is with in the above mentioned limit then you can invest such money. Otherwise you again pass resolution for further limit under section 372A.
If such dividend money which is going to invest is with in the above mentioned limit then you can invest such money. Otherwise you again pass resolution for further limit under section 372A.
22 October 2013
My Pleasure..........
22 October 2013
One More thing, Sorry for delay reply:
Investment in Mutual Fund & Govt:
Securities are falls outside Section 372A as the same are not issued by body
corporate. Most of the mutual funds are constituted as “Trust” under Indian Trust Act. Such trusts are not body corporate.
However investment in units of UTI Mutual fund which are issued by UTI trust company Pvt. Ltd. is well covered u/s. 372A and
investment in unit of UTI set up u/s. 3 of Unit trust of India Act, 1963 is also covered u/s. 372A.
Investment in Mutual Fund & Govt:
Securities are falls outside Section 372A as the same are not issued by body
corporate. Most of the mutual funds are constituted as “Trust” under Indian Trust Act. Such trusts are not body corporate.
However investment in units of UTI Mutual fund which are issued by UTI trust company Pvt. Ltd. is well covered u/s. 372A and
investment in unit of UTI set up u/s. 3 of Unit trust of India Act, 1963 is also covered u/s. 372A.
22 October 2013
One More thing, Sorry for delay reply:
Investment in Mutual Fund & Govt:
Securities are falls outside Section 372A as the same are not issued by body
corporate. Most of the mutual funds are constituted as “Trust” under Indian Trust Act. Such trusts are not body corporate.
However investment in units of UTI Mutual fund which are issued by UTI trust company Pvt. Ltd. is well covered u/s. 372A and
investment in unit of UTI set up u/s. 3 of Unit trust of India Act, 1963 is also covered u/s. 372A.
Investment in Mutual Fund & Govt:
Securities are falls outside Section 372A as the same are not issued by body
corporate. Most of the mutual funds are constituted as “Trust” under Indian Trust Act. Such trusts are not body corporate.
However investment in units of UTI Mutual fund which are issued by UTI trust company Pvt. Ltd. is well covered u/s. 372A and
investment in unit of UTI set up u/s. 3 of Unit trust of India Act, 1963 is also covered u/s. 372A.
Message likes :
1 times
23 October 2013
yes sir, in the above case all the investment is made in body corporate only.
23 October 2013
Then its ok.........
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST ITC REVERSE
- Fixe term employment
- Is any professional CA is here please reply
- Putting a heading on received mail
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Section 50-fixed asset-->building ceases to exist
- Gift Received from nonblood relative
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Reprocessing of rectification order AY 2025-26
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
