Section 372A(5)

This query is : Resolved

udit sharma (Querist)
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11 January 2011 Hi...

Company A has given a Share Application money of Rs. 2 Crores to Company B. Till date, the Company has not allotted any shares to Company A.

Can this be shown as an investment in Company B and an entry to this effect has to be made in the Register of Inter-Corporate Investments maintained under section 372A(5) of the Companies Act, 1956 by Company A ?

In my opinion, this will be treated as investment only when Company B makes an allotment to Company A.

Please help....

Regards

CS Udit Sharma

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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11 January 2011 Dear Udit,

I had Come across a Similar Issue during my Audit & You are Perfectly Correct , It will be Treated as Investment only on allotment.

Regards
Ankit Gulgulia