25 June 2008
A Company's land is sold which generates huge profit. Since land is not subject to Depreciation, can the entire profit ( Cost minus sale price) be distributed by way of Dividends to Share holders ? .
Incidentally, kindly note that the ICAI's EACO ( refer Chartered Accountant - July 2000 issue) is to credit the entire sale proceeds to the P & L Account, the above said profit csn not to be included for computing profit under under Sec. 349 (3)(d) of the Companies Act, 1956 for payment of commission to the managerial Commission.
Repeatedly, what about paying Dividend on the profit on sale of Immovable property?
CAclubindia
