Income Tax Act, 2025
Section 2: Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 11988).
2. Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 11988).
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machinery or plant of the nature referred to in clauses (a), (b) and (d) of 1[the second proviso]
to sub-section (1)] for the purposes of the business of the undertaking; or
(c) if at any time before the expiry of the ten years aforesaid, the assesseeutilises the
amount credited to the reserve account under sub-section (4) for distribution by way of
dividends or profits or for remittance outside India as profits or for the creation of any assets
outside India or for any other purpose which is not a purpose of the business of the
undertaking,
and the provisions of sub-section (4A) of section 155 shall apply accordingly:
Provided that nothing in clause (a) shall apply—
(i) where the ship, aircraft, machinery or plant is sold or otherwise transferred by the assessee
to the Government, a local authority, a corporation established by a Central, State or Provincial
Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956);
or
(ii) where the sale or transfer of the ship, aircraft, machinery or plant is made in connection
with the amalgamation or succession, referred to in sub-section (6) or sub-section (7).
(6) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise
transfers to the amalgamated company any ship, aircraft, machinery or plant, in respect of which
investment allowance has been allowed to the amalgamating company under sub-section (1),—
(a) the amalgamated company shall continue to fulfil the conditions mentioned in
sub-section (4) in respect of the reserve created by the amalgamating company and in respect
of the period within which such ship, aircraft, machinery or plant shall not be sold or
otherwise transferred and in default of any of these conditions, the provisions of
sub-section (4A) of section 155 shall apply to the amalgamated company as they would have
applied to the amalgamating company had it committed the default; and
(b) the balance of investment allowance, if any, still outstanding to the amalgamating
company in respect of such ship, aircraft, machinery or plant, shall be allowed to the
amalgamated company in accordance with the provisions of sub-section (3), so, however, that
the total period for which the balance of investment allowance shall be carried forward in the
assessments of the amalgamating company and the amalgamated company shall not exceed
the period of eight years specified in sub-section (3) and the amalgamated company shall be
treated 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;
and
of 1[the second proviso]
to sub-section
if at any time before the expiry of the ten years aforesaid, the assesseeutilises the
amount credited to the reserve account under sub-section
for distribution by way of
dividends or profits or for remittance outside India as profits or for the creation of any assets
outside India or for any other purpose which is not a purpose of the business of the
undertaking,
and the provisions of sub-section
of section 155 shall apply accordingly:
Provided that nothing in clause
shall apply—
where the ship, aircraft, machinery or plant is sold or otherwise transferred by the assessee
to the Government, a local authority, a corporation established by a Central, State or Provincial
Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956);
or
where the sale or transfer of the ship, aircraft, machinery or plant is made in connection
with the amalgamation or succession, referred to in sub-section
or sub-section
Where, in a scheme of amalgamation, the amalgamating company sells or otherwise
transfers to the amalgamated company any ship, aircraft, machinery or plant, in respect of which
investment allowance has been allowed to the amalgamating company under sub-section
the amalgamated company shall continue to fulfil the conditions mentioned in
sub-section
in respect of the reserve created by the amalgamating company and in respect
of the period within which such ship, aircraft, machinery or plant shall not be sold or
otherwise transferred and in default of any of these conditions, the provisions of
sub-section
of section 155 shall apply to the amalgamated company as they would have
applied to the amalgamating company had it committed the default; and
the balance of investment allowance, if any, still outstanding to the amalgamating
company in respect of such ship, aircraft, machinery or plant, shall be allowed to the
amalgamated company in accordance with the provisions of sub-section
and the amalgamated company shall be
treated as the assessee in respect of such ship, aircraft, machinery or plant for the purposes of
this section.
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
and
of sub-section
shall, so far as may be, apply to the firm
and the company.
Explanation.—The provisions of this sub-section shall apply only where—
all the property of the firm relating to the business immediately before the succession
becomes the property of the company;