Legal implications of sale of Mafatlal flatAs per the Companies Act 1956, Mr. Likhite was a director of Mafatlal Industries at the time of this suspicious sale. So:
- The company was required to pass a board resolution for such a transaction.
- A shareholder can ask justification for this transaction in which the director is being rewarded indirectly, and shareholders are being fleeced of their company’s asset.
- For the Company, it is a dividend given to its director, which is taxable.
- The difference amount between actual value (reckoned at Rs 6 cr.) and the sale price (Rs 1.25 cr) would be considered as income of Mr. Likhite, which is taxable at 30% and more.
- Further, under section 271(1)(c)- concealment of income or inaccurate particulars attract 100% to 300% penalty.
- The company was required to deduct TDS on this deemed income of Mr. Likhite.
Founder at Aam Janata
Vidyut has a keen interest in mass psychology and using it as a lens to understand contemporary politics, social inequality and other dynamics of power within the country. She is also into Linux and internet applications and servers and has sees technology as an important area India lacks security in.
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