Section 7 - Amendment of section 41 - Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986

7. Amendment of section 41. In section 41 of the Income-tax Act, with effect from the 1st day of April, 1988 .- (a) sub-sections (2) and (2A) and the Explanations thereunder shall be omitted; (b) in sub-section (4), for the Explanation, the following Explanation shall be substituted, namely :- Explanation .- For the purposes of sub-section (3), - (1) moneys payable in respect of any building, machinery, plant or furniture includes- (a) any insurance, salvage or compensation moneys payable in respect thereof: (b) where the building, machinery, plant or furniture is sold, the price for which it is sold, so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause (1) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect of such motor car shall be taken to be a sum which bears to the amount for which the motor car is sold or as the case may be, the amount of any insurance, salvage or compensation moneys payable in respect thereof (including the amount of scrap value if any) the same proportion as the amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as it would have been computed before applying the said proviso; (2) sold includes a transfer by way of exchange or a compulsory acquisition under any law for the time being in force but does not include a transfer, in a scheme of amalgamation, of any asset by the amalgamating company to the amalgamated company where the amalgamated company is an Indian company. ; (c) in sub-section (5), the words, brackets, figures and letter sub-section (2), sub-section (2A), shall be omitted.