Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

Investment allowance

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... s section in respect of- ( a ) any machinery or plant installed in any office premises or any residential accommodation, including any accommodation in the nature of a guest house ; ( b ) any office appliances or road transport vehicles ; ( c ) any ship, machinery or plant in respect of which the deduction by way of development rebate is allowable under section 33 ; and ( d ) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or profession of any one previous year. 4 [ Explanation. -For the purposes of this sub-section, actual cost means the actual cost of the ship, aircraft, machinery or plant to the assessee as reduced by that part of such cost which has been met out of the amount released to the assessee under sub-section (6) of section 32AB .] (2) The ship or aircraft or machinery or plant referred to in sub-section (1) shall be the following, namely :- ( a ) a new ship or new aircraft acquired after the 31st day of March, 1976, by an assessee engaged in the business of operation of ship .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... y or plant has been allowed or is allowable under the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee, ] ( 2 ) an industrial undertaking shall be deemed to be a small-scale industrial undertaking, if the aggregate value of the machinery and plant (other than tools, jigs, dies and moulds) installed, as on the last day of the previous year, for the purposes of the business of the undertaking 12 [ does not exceed,- 13 [ ( i ) in a case where the previous year ends before the 1st day of August, 1980, ten lakh rupees ; ( ii ) in a case where the previous year ends after the 31st day of July, 1980, but before the 18th day of March, 1985, twenty lakh rupees; and ( iii ) in a case where the previous year ends after the 17th day of March, 1985, thirty-five lakh rupees ,]] and for this purpose the value of any machinery or plant shall be,- ( a ) in the case of any machinery or plant owned by the assessee, the actual cost thereof to the assessee ; and ( b ) in the case of any machinery or plant hired by th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... g a society registered under the Societies Registration Act, 1860 (21 of 1860)] and financed wholly or mainly by the Government; ( b ) 17 [ *** ] ( c ) University means a University established or incorporated by or under a Central, State or Provincial Act and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956) to be a University for the purposes of that Act. ] 18 [ (2C) Where any new machinery or plant, being machinery or plant which would assist in control of pollution or protection of environment and which has been notifiedin this behalf by the Central Government in the Official Gazette, is installed after the 31st day of May, 1983 19 [ but before the 1st day of April, 1987], in any industrial undertaking referred to in sub-clause ( i ) or sub-clause ( ii ) or sub-clause ( iii ) of clause ( b ) of sub-section (2), the provisions of sub- section (1) shall have effect in relation to such machinery or plant as if for the words twenty-five per cent , the words thirty-five per cent had been substituted. ] (3) Where the total income of the assessee assessable for the assessment year relevant to the prev .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... allowance has to be made under clause ( ii ) in respect of amounts carried forward from more than one assessment year, the amount carried forward from an earlier assessment year shall be allowed before any amount carried forward from a later assessment year. (4) The deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely :- ( i ) the particulars prescribed in this behalf have been furnished by the assessee in respect of the ship or aircraft or machinery or plant; ( ii ) an amount equal to seventy-five per cent of the investment allowance to be actually allowed is debited to the profit and loss account of 20 [ any previous year in respect of which the deduction is to be allowed under sub-section (3) or any earlier previous year (being a previous year not earlier than the year in which the ship or aircraft was acquired or the machinery or plant was installed or the ship, aircraft, machinery or plant was first put to use)] and credited to a reserve account (to be called the Investment Allowance Reserve Account ) to be utilised- ( a ) for the purposes of acquiring, before the expiry of a period of ten years next following .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e the difference in the total income as proposed to be computed by him and the total income as returned by the assessee arises out of the application of the proviso to sub-section (1) of section 145 or sub-section (2) of that section or the omission by the assessee to disclose his income fully and truly. (5) Any allowance made under this section in respect of any ship, aircraft, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act- ( a ) if the ship, aircraft, machinery or plant is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired or installed; or ( b ) if at any time before the expiry of ten years from the end of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed, the assessee does not utilise the amount credited to the reserve account under sub-section (4) for the purposes of acquiring a new ship or a new aircraft or new machinery or plant [other than machinery or plant of the nature referred to in clauses ( a ), ( b ) and ( d ) of the 26 [ second ] proviso to sub-secti .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ted as the assessee in respect of such ship, aircraft, machinery or plant for the purposes of this section. (7) Where a firm is succeeded to by a company in the business carried on by it as a result of which the firm sells or otherwise transfers to the company any ship, aircraft, machinery or plant, the provisions of clauses ( a ) and ( b ) of sub-section (6) shall, so far as may be, apply to the firm and the company. Explanation . -The provisions of this sub-section shall apply only where- ( i ) all the property of the firm relating to the business immediately before the succession becomes the property of the company; ( ii ) all the liabilities of the firm relating to the business immediately before the succession become the liabilities of the company; and ( iii ) all the shareholders of the company were partners of the firm immediately before the succession. (8) The Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette, direct that the deduction allowable under this section shall not be allowed in respect of any ship or aircraft acquired or any machinery or plant installed after such date 27 [ *** ] .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... eferred to as the initial assessment year) and a block of further period of four years beginning with the assessment year immediately succeeding the initial assessment year .] (9) [ Omitted by the Finance Act, 1990, w.r.e.f. 1-4-1976. ] ----------------------------------- Notes :- 1. Inserted by the Finance Act, 1976, w.e.f. 1-4-1976. 2. Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 3. Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 4. Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 5. Substituted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978. 6. Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 7. Inserted by the Finance Act, 1983, w.e.f. 1-4-1984. 8. Substituted for 1st day of April, 1988 by the Finance Act, 1986, w.e.f. 1-4-1987. 9. Substituted for sub-section (4) by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978. 10. Inserted by the Finance Act, 1983, w.e.f. 1-6-1983. 11. Substituted by the Taxation Laws (Amendment Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1988. 12. Substitu .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates