13 October 2009
suppose a service agreement has been executed between the holding and subsidiary comapny, the subsidiary company will use the office space, house keeping, furniture and fixtures of the holding company, both the companies have common directors. The paid up capital of the holding company is more than Rs. 1 cr, both are private limited company.
13 October 2009
The crucial word in the section is 'goods'. But goods is not defined in the act. So reference may be made to the definition given under the Sale of Goods Act,1930 wherein goods means every kind of movable property. Here the service contract is mainly for Immovable property and ,therefore, application of section 297 may be carefully looked into in view of the clarification letter No 0/41/90-CL-X dated 27/03/1990 issued bu DCA.
13 October 2009
But sir as the nature of agreement is "service agreement" as mentioned by Ms. Mamta which is very much cover in 297. Can we conclude section 297 is applicable?
13 October 2009
Sir, In Sona steering Systems ltd's case, the agreement was to take on lease office premises,DCA clarified that 297 is not applicable being a transaction in immovable properties.
CAclubindia
