Section 297

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Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2012 is there any case law which says that section 297 applies on Immovable property????

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Ajay Mishra

Ajay Mishra (Expert)
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01 March 2012 Hi

Yes.....

Section 297 does not apply to:

1. Giving or taking loans.
2.Contract in respect of immovable property (as it is not 'good' ).{Letter No. 9/4190-CL-X dated 27.03.1990}.
3.Contract between two public Companies.
4.Contract of employment of director or managing or whole time director.[ Circuler No.8/11/75-CL-V dated 27.03.1975]
5.Contract for employment of relative of director.
6.Contract entered into by the company with the dealer on principle to principle basis. [Circuler No. FM 8/297/56-PR dated 02-08-1956]
7. Professional services of the nature given by firms of solicitors and advocates, etc.[circuler No. 8/11/75-CL-V dated 05.06.1975]
8.hiring of office premises on rent as the transaction is in immovable property. [Department Clarification dated 10-09-1990]

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 March 2012 Section 297 is not applicable to Immovable property. Reason is as follows:-
i) Goods is not defined in Co's Act,1956.
ii) So Sale of goods Act,1930 has to be referred to.
iii) Goods, as per the act referred in clause (ii)above, means every kind of movable property.
Thus sale or purchase as also lease of immovable property is out side the scope of 297.

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Akhilesh Kumar Jha

Akhilesh Kumar Jha (Expert)
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01 March 2012 yes i agree the immovable property is not cover under the definition of GOODS, so this section not cover the sale of purchases of immovable property. Goods is not defined under Companies Act, so we take this defination from sales of goods act.

Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2012 can you provide me the above mentioned letter dated 27.03.1990

Jiten Gupta

Jiten Gupta (Expert)
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01 March 2012 Agreed with views of esteemed experts!!!!!

Really very useful solution!!!!

Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2012 thanks for reply.

But as per budget 2010 definition of services in Finance Act includes renting of immovable property.

is after this amendment section 297 applies on renting of immovable property????

Ajay Mishra

Ajay Mishra (Expert)
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01 March 2012 Letter is not available on site, so I am unable to provide the details of letter.

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