Income Tax Act, 2025
Section 4: Subs. by Act 23 of 2012, s. 30, for the Explanation (w.e.f. 12013).
4. Subs. by Act 23 of 2012, s. 30, for the Explanation (w.e.f. 12013).
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(10) Where it appears to the Assessing Officer that, owing to the close connection between the
assessee carrying on the eligible business 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 such
eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business
for the purposes of the deduction under this section, take the amount of profits as may be reasonably
deemed to have been derived therefrom:
1[Provided that in case the aforesaid arrangement involves a specified domestic transaction referred to
in section 92BA, the amount of profits from such transaction shall be determined having regard to arm’s
length price as defined in clause (ii) of section 92F.]
(11) 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 undertaking or enterprise with effect from such date as it may specify in the
notification.
(12) Where any undertaking of an Indian company which is entitled to the deduction under this
section is transferred, before the expiry of the period specified in this section, to another Indian company
in a scheme of amalgamation or demerger—
(a) no deduction shall be admissible under this section to the amalgamating or the demerged
company for the previous year in which the amalgamation or the demerger takes place; and
(b) the provisions of this section shall, as far as may be, apply to the amalgamated or the
resulting company as they would have applied to the amalgamating or the demerged company if the
amalgamation or demerger had not taken place.
2[(12A) Nothing contained in sub-section (12) shall apply to any enterprise or undertaking which is
transferred in a scheme of amalgamation or demerger on or after the 1st day of April, 2007.]
3[(13) Nothing contained in this section shall apply to any Special Economic Zones notified on or
after the 1st day of April, 2005 in accordance with the scheme referred to in sub-clause (iii) of clause (c)
of sub-section (4).]
4[Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this section
shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works
contract awarded by any person (including the Central or State Government) and executed by the
undertaking or enterprise referred to in sub-section (1).]
Where it appears to the Assessing Officer that, owing to the close connection between the
assessee carrying on the eligible business 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 such
eligible business, the Assessing Officer shall, in computing the profits and gains of such eligible business
for the purposes of the deduction under this section, take the amount of profits as may be reasonably
deemed to have been derived therefrom:
1[Provided that in case the aforesaid arrangement involves a specified domestic transaction referred to
in section 92BA, the amount of profits from such transaction shall be determined having regard to arm’s
length price as defined in clause
of section 92F.]
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 undertaking or enterprise with effect from such date as it may specify in the
notification.
Where any undertaking of an Indian company which is entitled to the deduction under this
section is transferred, before the expiry of the period specified in this section, to another Indian company
in a scheme of amalgamation or demerger—
no deduction shall be admissible under this section to the amalgamating or the demerged
company for the previous year in which the amalgamation or the demerger takes place; and
the provisions of this section shall, as far as may be, apply to the amalgamated or the
resulting company as they would have applied to the amalgamating or the demerged company if the
amalgamation or demerger had not taken place.
2[
Nothing contained in sub-section
shall apply to any enterprise or undertaking which is
transferred in a scheme of amalgamation or demerger on or after the 1st day of April, 2007.]
3[
Nothing contained in this section shall apply to any Special Economic Zones notified on or
after the 1st day of April, 2005 in accordance with the scheme referred to in sub-clause
of clause
of sub-section
which is in the nature of a works
contract awarded by any person (including the Central or State Government) and executed by the
undertaking or enterprise referred to in sub-section