TMI BlogDeduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakingsX X X X Extracts X X X X X X X X Extracts X X X X ..... rial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; ( ii ) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose; ( iii ) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India : Provided that the condition in this clause shall, in relation to a small scale industrial undertaking or an industrial undertaking referred to in sub-section (4) shall apply as if the words not being any article or thing specified in the list in the Eleventh Schedule had been omitted. Explanation 1.- For the purposes of clause ( ii ), any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely :- ( a ) such machinery or pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 995 and ending on the 31st day of March, 2 [ 2002 ] . (4) The amount of deduction in the case of an industrial undertaking in an industrially backward State specified in the Eighth Schedule shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from such industrial undertaking : Provided that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) subject to fulfilment of the condition that it begins to manufacture or produce articles or things or to operate its cold storage plant or plants during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 3 [ 2004 ] : Provided further that in the case of such industries in the North-Eastern Region, as may be notified by the Central Government, the amount of deduction shall be hundred per cent of profits and gains for a period of ten assessment years, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent where the assessee is a company) of the profits and gains of an industrial undertaking : Provided that the total period of deduction does not exceed eight consecutive assessment years (or where the assessee is a co-operative society, twelve consecutive assessment years) : Provided further that the industrial undertaking begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994 and ending on the 31st day of March, 9 [ 2004 ]. (6) The amount of deduction in the case of the business of a ship shall be thirty per cent of the profits and gains derived from such ship for a period of ten consecutive assessment years including the initial assessment year provided that the ship- ( i ) is owned by an Indian company and is wholly used for the purposes of the business carried on by it; ( ii ) was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and ( iii ) is brought into use by the Indian company at any time during the period beginning on the 1st day of Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001; ( c ) the deduction under clause ( a ) or clause ( b ) shall be available only if- ( i ) the business of the hotel is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of a building previously used as a hotel or of any machinery or plant previously used for any purpose; ( ii ) the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees; ( iii ) the hotel is for the time being approved by the prescribed authority: Provided that any hotel approved by the prescribed authoritybefore the 1st day of April, 1999 shall be deemed to have been approved under this sub-section. 10 [ (7A) The amount of deduction in the case of any multiplex theatre shall be- ( a ) fifty per cent of the profits and gains derived, from the business of building, owning and operating a multiplex theatre, for a period of five consecutive years beg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of five assessment years beginning from the initial assessment year if such company- ( a ) is registered in India; ( b ) has the main object of scientific and industrial research and development; ( c ) is for the time being approved by the prescribed authority at any time before the 1st day of April, 1999. 11 [ (8A) The amount of deduction in the case of any company carrying on scientific research and development shall be hundred per cent of the profits and gains of such business for a period of ten consecutive assessment years, beginning from the initial assessment year, if such company- ( i ) is registered in India; ( ii ) has its main object the scientific and industrial research and development; ( iii ) is for the time being approved by the prescribed authority at any time after the 31st day of March, 2000 but before the 1st day of April, 12 [ 2007 ] ; ( iv ) fulfils such other conditions as may be prescribed .] 29 [ (9) The amount of deduction to an undertaking shall be hundred per cent. of the profits for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 32 [ 2008 ] by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- ( a ) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- ( i ) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; ( ii ) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004 38 [but not later than the 31st day of March, 2005], within four years from the end of the financial year in which the housing project is approved by the local authority. 39 [ (iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority.] Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the housing project as a works contract awarded by any person (including the Central or State Government). ] (11) Notwithstanding anything contained in clause ( iii ) of sub-section (2) and sub-sections (3), (4) and (5), the amount of deduction in a case of industrial undertaking deriving profit from the business of setting up and operating a cold chain facility for agricultural produce, shall be hundred per cent of the profits and gains derived from such industrial undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from the operation of such facility in a manner that the total period of deduction does not exceed ten consecutive assessment years (or twelve consecutive assessment years where the assessee is a co-operative society) and subject to fulfilment of the condition that it begins to operate such facility on or after the 1st day of April, 1999 but before the 14 [ 1st day of April, 2004 ]. 15 [ (11A) The amount of deduction in a case of 16 [ an undertaking deriving profit from the business of processing, preser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the business of operating and maintaining a hospital located anywhere in India, other than the excluded area, shall be hundred per cent. of the profits and gains derived from such business for a period of five consecutive assessment years, beginning with the initial assessment year, if (i) the hospital is constructed and has started or starts functioning at any time during the period beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2013; (ii) the hospital has at least one hundred beds for patients; (iii) the construction of the hospital is in accordance with the regulations or bye-laws of the local authority; and 49 [ (iv) the assessee furnishes the report of audit in such form and containing such particulars, as may be prescribed, duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB, certifying that the deduction has been correctly claimed. ] Explanation .- For the purposes of this sub-section- (a) a hospital shall be deemed to have been constructed on the date on which a completion certificate in respect of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be used for the purpose of holding conferences and seminars, being of such size and number and having such other facilities and amenities, as may be prescribed; ] ( b ) hilly area means any area located at a height of one thousand metres or more above the sea level; ( c ) initial assessment year - ( i ) in the case of an industrial undertaking or cold storage plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the cold chain facility or the ship is first brought into use or the business of the hotel starts functioning; ( ii ) in the case of a company carrying on scientific and industrial research and development, means the assessment year relevant to the previous year in which the company is approved by the prescribed authority for the purposes of sub-section (8); ( iii ) in the case of an undertaking engaged in the business of commercial production or refining of mineral oil referred to in sub-section (9), means the assessment year relevant to the previous year in which the undertaking commenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions specify in this behalf by notification in the Official Gazette; (g) small-scale industrial undertaking means an industrial undertaking which is, as on the last day of the previ ous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951) .] ************************ Notes :- 1. Substituted for (11) and (11A) by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005. Earlier and (11A) was inserted by the Finance Act, 2001, w.e.f. 1-4-2002. 2. Substituted for 2000 by the Finance Act, 2000, w.e.f. 1-4-2001. 3. Substituted for 2002 by the Finance Act, 2002, w.e.f. 1-4-2003. Earlier 2002 was substituted for 2000 by the Finance Act, 2000, w.e.f. 1-4-2001. 4. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004. 5. Fourth and fifth provisos inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005. 6. Figure 2012 shall be substituted for 2007 by the Finance Act, 2007, w.e.f. 1-4-2008. 7. Substituted for 2005 by the Finance Act, 2005, w.e.f. 1-4-2006. 8. Substituted for 2002 by the Finance Act, 2002, w.e.f. 1-4-2003. Ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Act, 2001, w.e.f. 1-4-2002. 23. Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005. 24. Sub-clauses (v) and (vi) inserted by the Finance Act, 2002, w.e.f. 1-4-2003. 25. Inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005. 26. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003. 27. Inserted by the Finance Act, 2008, w.e.f. 1-4-2008. 28. Inserted by the Finance Act, 2008, w.e.f. 1-4-2009. 29. Substituted vide Finance (No.2) Act, 2009, w.e.f. 1-4-2000, before it was read as, (9) The amount of deduction to an undertaking which begins commercial production or refining of mineral oil shall be hundred per cent of the profits for a period of seven consecutive assessment years including the initial assessment year : Provided that where the undertaking is located in North-Eastern Region, it has begun or begins commercial production of mineral oil before the 1st day of April, 1997 and where it is located in any part of India, it begins commercial production of mineral oil on or after the 1st day of April, 1997 : Provided further that where the undertaking is engaged in refining of mineral oil, it begins refining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 27-03-2020 w.e.f. 01-04-2020 before it was read as ( iii ) the assessee furnishes alongwith the return of income, the report of an audit in such form and containing such particulars as may be prescribed and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed. 47. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as ( iii ) the assessee furnishes alongwith the return of income, the report of an audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed. 48. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as ( iv ) the assessee furnishes along with the return of income, the report of audit in such form and containing such particulars as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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