A Private Company having a paid up Capital of more than Rs. 1 Crore has entered into a Lease Agreement with one of its Group Company (also a Pvt. Ltd. Company) in which the Directors of the Company are interested and is paying a rent of Rs. 40000/- p.m.
Is this transaction covered u/s 297 and if yes, then CG approval will also be required as the paid up capital of the Company exceeds Rs. 1 crore.
please support your answer with ref. to any notification/ circular/ case laws comes in this regard
19 May 2010
In case of lease of immovable property Section 297 is not applicable as 297 is applicable for dealing in goods and services only & not immovable property.
For ref. you can refer to Sec 297 Commentary of any book.
CAclubindia
