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TMI BlogProfits chargeable to taxX X X X Extracts X X X X X X X X Extracts X X X X ..... d person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year. 2[Explanation 1.-For the purposes of this sub-section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first-mentioned person under clause (a) or the successor in business under clause (b) of that sub-section by way of writing off such liability in his accounts.] 3[Explanation 2].-For the purposes of this sub-section, "successor in business" means,- (i) where there has been an amalgamation of a company with another company, the amalgamated company; (ii) where the first-mentioned person is succeeded by any other person in that business or profession, the other person; (iii) where a firm carrying on a business or profession i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a bad debt or part of debt under the provisions of clause (vii) of sub-section (1) of section 36, then, if the amount subsequently recovered on any such debt or part is greater than the difference between the debt or part of debt and the amount so allowed, the excess shall be deemed to be profits and gains of business or profession, and accordingly chargeable to income-tax as the income of the previous year in which it is recovered, whether the business or profession in respect of which the deduction has been allowed is in existence in that year or not. 10[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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently during any previous year the assessee has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him or the value of benefit accruing to him, shall be deemed to be profits and gains of business or profession and accordingly chargeable to Income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not." 2. Inserted vide Section 16 of the Finance (No. 2) Act, 1996 w.e.f. 01-04-1997 3. Renumbered vide Section 16 of the Finance (No. 2) Act, 1996 w.e.f. 01-04-1997 before it was read as, "Explanation" 4. Inserted vide Section 24 of the Finance Act, 1999 w.e.f. 01-04-2000 5. Inserted vide Section 16 of the Finance (No. 2) Act, 1998 w.e.f. 01-04-1998 Earlier, Amended vide Section 11 of the Finance (No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fession is in existence in that previous year." 6. Omitted vide Section 7 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f. 01-04-1988 before it was read as, "(2A) Where any structure or work in or in connection with a building, being the structure or work referred to in sub-section (1A) of section 32, is sold, discarded, demolished, destroyed or is surrendered as a result of the determination of the lease or other right of occupancy in respect of the building and the moneys payable in respect of such structure or work together with the amount of scrap value, if any, exceed the written down value, so much of the excess as does not exceed the difference between the actual cost of the structure or work and its written down value shall be chargeable to income-tax as income of the business or profession of the previous year in which the moneys payable for the structure or work became due. Explanation 1.-Where the moneys payable in respect of the structure or work referred to in this sub-section become due in a previous year in which the business or profession for the purpose of which the structure or work was constructed or done is no long ..... X X X X Extracts X X X X X X X X Extracts X X X X
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