15 December 2010
Under section 297 related party disclosure under what way do the company deposit amount with the company from which services are availed. is der any provision that if we deposit it by cash the provisions of section 297 is not applicable. what is the accounting treatment??
As per provisions of section 297 of the Companies Act, 1956 any contract entered into with the specified parties sale, purchase or supply of goods, materials and services if entered into for cash at prevailing market prices then the provisions of section 297 are not applicable...... Payment by Cheque is also treated as equivalent to Cash Payment....
15 December 2010
Section 297 exempts only the purchase or sale of goods and materials from or to the company by any director, relative, firm, partner or private company for cash at prevailing market prices. Services are not exempted. Hence Section 297 is very much applicable.
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