Income Tax Act, 2025
Section 6: Subs. by Act 4 of 1988, s. 2 for “income-tax officer”(w.e.f. 11988).
6. Subs. by Act 4 of 1988, s. 2 for “income-tax officer”(w.e.f. 11988).
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(ii) to claim that any asset, being land, building, machinery, plant or furniture acquired or
constructed by the fund, trust, company, association of persons, body of individuals, society or other
institution out of the sum paid by the assessee, be transferred to him, and where any claim is so made,
such asset shall be transferred, as soon as may be, to him.]
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2[(13) No deduction or allowance shall be allowed in respect of any marked to market loss or other
expected loss, except as allowable under clause (xviii) of sub-section (1) of section 36.]
41. Profits chargeable to tax.— 3[(1) Where an allowance or deduction has been made in the
assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee
(hereinafter referred to as the first-mentioned person) and subsequently during any previous year,—
(a) the first-mentioned person 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 such person 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; or
(b) the successor in business has obtained, whether in cash or in any other manner whatsoever,
any amount in respect of which loss or expenditure was incurred by the first-mentioned 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.
4[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.]
Explanation 5[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 is succeeded by another firm, the other
firm;]
6[(iv) where there has been a demerger, the resulting company.]
7[(2) Where any building, machinery, plant or furniture,—
(a) which is owned by the assessee;
to claim that any asset, being land, building, machinery, plant or furniture acquired or
constructed by the fund, trust, company, association of persons, body of individuals, society or other
institution out of the sum paid by the assessee, be transferred to him, and where any claim is so made,
such asset shall be transferred, as soon as may be, to him.]
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2[
No deduction or allowance shall be allowed in respect of any marked to market loss or other
expected loss, except as allowable under clause
of sub-section
of section 36.]
41. Profits chargeable to tax.— 3[
Where an allowance or deduction has been made in the
assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee
(hereinafter referred to as the first-mentioned person) and subsequently during any previous year,—
the first-mentioned person 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 such person 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; or
the successor in business has obtained, whether in cash or in any other manner whatsoever,
any amount in respect of which loss or expenditure was incurred by the first-mentioned person or
some benefit in respect of the trading liability referred to in clause
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.
4[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
or
the successor in business under clause
of that sub-section by way of writing off such liability in his
accounts.]
Explanation 5[2]—For the purposes of this sub-section, “successor in business” means,—
where there has been an amalgamation of a company with another company, the
amalgamated company;
where the first-mentioned person is succeeded by any other person in that business or
profession, the other person;
where a firm carrying on a business or profession is succeeded by another firm, the other
firm;]
6[
where there has been a demerger, the resulting company.]
7[
Where any building, machinery, plant or furniture,—
which is owned by the assessee;