Income Tax Act, 2025
Section 4: Subs. by s. 8, ibid., for “under sub-section (1)” (w.e.f. 11965).
4. Subs. by s. 8, ibid., for “under sub-section (1)” (w.e.f. 11965).
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allowed for the following assessment year shall be such amount as is sufficient to reduce the total
income of the assessee assessable for that assessment year, computed in the manner aforesaid, to nil,
and the balance of the development rebate, if any, still outstanding shall be carried forward to the
following assessment year and so on, so however, that no portion of the development rebate shall be
carried forward for more than eight assessment years immediately succeeding the assessment year
relevant to the previous year in which the ship was acquired or the machinery or plant installed or the
immediately succeeding previous year, as the case may be.
Explanation.—Where for any assessment year development rebate is to be allowed in accordance
with the provisions of sub-section (2) in respect of ships acquired or machinery or plant installed in
more than one previous year, and the total income of the assessee assessable for that assessment year
1[(the total income for this purpose being computed without making any allowance under
sub-section (1) or sub-section (1A) of this section or sub-section (1) of section 33A or any deduction
under Chapter VI-A 2***] is less than the aggregate of the amounts due to be allowed in respect of the
assets aforesaid for that assessment year, the following procedure shall be followed, namely :—
(i) the allowance under clause (ii) of sub-section (2) shall be made before any allowance
under clause (i) of that sub-section is made; and
(ii) where an allowance has to be made under clause (ii) of sub-section (2) in respect of
amounts carried forward from more than one assessment year, the amount carried forward from
an earlier assessment year shall be allowed before any amount carried forward from a later
assessment year.
3[(3) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to
the amalgamated company any ship, machinery or plant in respect of which development rebate has been
allowed to the amalgamating company under sub-section (1) or sub-section (1A),—
(a) the amalgamated company shall continue to fulfil the conditions mentioned in sub-section (3)
of section 34 in respect of the reserve created by the amalgamating company and in respect of the
period within which such ship, machinery or plant shall not be sold or otherwise transferred and in
default of any of these conditions, the provisions of sub-section (5) 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 development rebate, if any, still outstanding to the amalgamating company in
respect of such ship, machinery or plant shall be allowed to the amalgamated company in accordance
with the provisions of sub-section (2), so, however, that the total period for which the balance of
development rebate 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 (2) and the
amalgamated company shall be treated as the assessee in respect of such ship, machinery or plant for
the purposes of this section and section 34.]
(4) 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, machinery or plant, the provisions of
clauses (a) and (b) of sub-section (3) shall, so far as may be, apply to the firm and the company.
1. Subs. by Act 20 of 1967, s. 33 and the Third Schedule, for certain brackets, words, figures and letters (w.e.f. 11968).
2. The words, figures and letter “or section 280-O” omitted by Act 26 of 1988, s. 54 (w.e.f. 11988).
in respect of ships acquired or machinery or plant installed in
more than one previous year, and the total income of the assessee assessable for that assessment year
1[(the total income for this purpose being computed without making any allowance under
sub-section
or sub-section
of this section or sub-section
of section 33A or any deduction
under Chapter VI-A 2***] is less than the aggregate of the amounts due to be allowed in respect of the
assets aforesaid for that assessment year, the following procedure shall be followed, namely :—
the allowance under clause
of sub-section
shall be made before any allowance
under clause
of that sub-section is made; and
where an allowance has to be made under clause
of sub-section
in respect of
amounts carried forward from more than one assessment year, the amount carried forward from
an earlier assessment year shall be allowed before any amount carried forward from a later
assessment year.
3[
Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to
the amalgamated company any ship, machinery or plant in respect of which development rebate has been
allowed to the amalgamating company under sub-section
or sub-section
the amalgamated company shall continue to fulfil the conditions mentioned in sub-section
of section 34 in respect of the reserve created by the amalgamating company and in respect of the
period within which such ship, 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 development rebate, if any, still outstanding to the amalgamating company in
respect of such ship, 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, machinery or plant for
the purposes of this section and section 34.]
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, machinery or plant, the provisions of
clauses
and
of sub-section
shall, so far as may be, apply to the firm and the company.
1. Subs. by Act 20 of 1967, s. 33 and the Third Schedule, for certain brackets, words, figures and letters (w.e.f. 11968).
2. The words, figures and letter “or section 280-O” omitted by Act 26 of 1988, s. 54 (w.e.f. 11988).