Income Tax Act, 2025
Section 3: Ins. by Act 49 of 1991, s. 31 (w.e.f. 11991).
3. Ins. by Act 49 of 1991, s. 31 (w.e.f. 11991).
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vessels or other powered craft] were the only source of income of the assessee during the previous years
relevant to the initial assessment year and to every subsequent assessment year up to and including the
assessment year for which the determination is to be made.
(7) Where the assessee is a person other than a company or a co-operative society, the deduction
under sub-section (1) from profits and gains derived from an industrial undertaking shall not be
admissible unless the accounts of the industrial undertaking for the previous year relevant to the
assessment year for which the deduction is claimed have been audited by an accountant, as defined in
the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of
income, the report of such audit in the prescribed form duly signed and verified by such accountant.
(8) Where any goods held for the purposes of the business of the industrial undertaking or the hotel or
the operation of the ship 1[or the business of repairs to ocean-going vessels or other powered craft] are
transferred to any other business carried on by the assessee, or where any goods held for the purposes of
any other business carried on by the assessee are transferred to the business of the industrial undertaking
or the hotel or the operation of the ship 1[or the business of repairs to ocean-going vessels or other
powered craft] and, in either case, the consideration, if any, for such transfer as recorded in the accounts
of the business of the industrial undertaking or the hotel or the operation of the ship 1[or the business of
repairs to ocean-going vessels or other powered craft] does not correspond to the market value of such
goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits
and gains of the industrial undertaking or the business of the hotel or the operation of the ship 1[or the
business of repairs to ocean-going vessels or other powered craft shall be computed as if the transfer, in
either case, had been made at the market value of such goods as on that date:
Provided that where, in the opinion of the 2[Assessing Officer], the computation of the profits and
gains of the industrial undertaking or the business of the hotel or the operation of the ship 1[or the
business of repairs to ocean-going vessels or other powered craft] in the manner hereinbefore specified
presents exceptional difficulties, the 2[Assessing Officer] may compute such profits and gains on such
reasonable basis as he may deem fit.
Explanation.—In this sub-section, “market value”, in relation to any goods, means the price that such
goods would ordinarily fetch on sale in the open market.
(9) Where it appears to the 2[Assessing Officer] that, owing to the close connection between the
assessee carrying on the business of the industrial undertaking or the hotel or the operation of the ship 1[or
the business of repairs to ocean-going vessels or other powered craft] to which this section applies and
any other person, or for any other reason, the course of business between them is so arranged that the
business transacted between them produces to the assessee more than the ordinary profits which might be
expected to arise in the business of the industrial undertaking or the hotel or the operation of the ship 1[or
the business of repairs to ocean-going vessels or other powered craft], the 2[Assessing Officer] shall, in
computing the profits and gains of the industrial undertaking or the hotel or the ship 1[or the business of
repairs to ocean-going vessels or other powered craft] for the purposes of the deduction under this section,
take the amount of profits as may be reasonably deemed to have been derived therefrom.
(10) The Central Government may, after making such inquiry as it may think fit, direct, by
notification in the Official Gazette, that the exemption conferred by this section shall not apply to any
class of industrial undertakings with effect from such date as it may specify in the notification.]
Where the assessee is a person other than a company or a co-operative society, the deduction
under sub-section
from profits and gains derived from an industrial undertaking shall not be
admissible unless the accounts of the industrial undertaking for the previous year relevant to the
assessment year for which the deduction is claimed have been audited by an accountant, as defined in
the Explanation below sub-section
of section 288, and the assessee furnishes, along with his return of
income, the report of such audit in the prescribed form duly signed and verified by such accountant.
Where any goods held for the purposes of the business of the industrial undertaking or the hotel or
the operation of the ship 1[or the business of repairs to ocean-going vessels or other powered craft] are
transferred to any other business carried on by the assessee, or where any goods held for the purposes of
any other business carried on by the assessee are transferred to the business of the industrial undertaking
or the hotel or the operation of the ship 1[or the business of repairs to ocean-going vessels or other
powered craft] and, in either case, the consideration, if any, for such transfer as recorded in the accounts
of the business of the industrial undertaking or the hotel or the operation of the ship 1[or the business of
repairs to ocean-going vessels or other powered craft] does not correspond to the market value of such
goods as on the date of the transfer, then, for the purposes of the deduction under this section, the profits
and gains of the industrial undertaking or the business of the hotel or the operation of the ship 1[or the
business of repairs to ocean-going vessels or other powered craft shall be computed as if the transfer, in
either case, had been made at the market value of such goods as on that date:
Provided that where, in the opinion of the 2[Assessing Officer], the computation of the profits and
gains of the industrial undertaking or the business of the hotel or the operation of the ship 1[or the
business of repairs to ocean-going vessels or other powered craft] in the manner hereinbefore specified
presents exceptional difficulties, the 2[Assessing Officer] may compute such profits and gains on such
reasonable basis as he may deem fit.
Explanation.—In this sub-section, “market value”, in relation to any goods, means the price that such
goods would ordinarily fetch on sale in the open market.
Where it appears to the 2[Assessing Officer] that, owing to the close connection between the
assessee carrying on the business of the industrial undertaking or the hotel or the operation of the ship 1[or
the business of repairs to ocean-going vessels or other powered craft] to which this section applies and
any other person, or for any other reason, the course of business between them is so arranged that the
business transacted between them produces to the assessee more than the ordinary profits which might be
expected to arise in the business of the industrial undertaking or the hotel or the operation of the ship 1[or
the business of repairs to ocean-going vessels or other powered craft], the 2[Assessing Officer] shall, in
computing the profits and gains of the industrial undertaking or the hotel or the ship 1[or the business of
repairs to ocean-going vessels or other powered craft] for the purposes of the deduction under this section,
take the amount of profits as may be reasonably deemed to have been derived therefrom.
The Central Government may, after making such inquiry as it may think fit, direct, by
notification in the Official Gazette, that the exemption conferred by this section shall not apply to any
class of industrial undertakings with effect from such date as it may specify in the notification.]