Income Tax Act, 2025
Section 7: Ins. by Act 21 of 1998, s. 9 (w.e.f. 11998).
7. Ins. by Act 21 of 1998, s. 9 (w.e.f. 11998).
154
the moneys payable in respect of such building, machinery, plant or furniture, together with the
amount of scrap value, if any, fall short of the written down value thereof:
Provided that such deficiency is actually written off in the books of the assessee.
Explanation.—For the purposes of this clause,—
(1) “moneys payable” in respect of any building, machinery, plant or furniture includes—
(a) any insurance, salvage or compensation moneys payable in respect thereof;
(b) where the building, machinery, plant or furniture is sold, the price for which it is sold,
so, however, that where the actual cost of a motor car is, in accordance with the proviso to
clause (1) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect
of such motor car shall be taken to be a sum which bears to the amount for which the motor car is
sold or, as the case may be, the amount of any insurance, salvage or compensation moneys
payable in respect thereof (including the amount of scrap value, if any) the same proportion as the
amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as
it would have been computed before applying the said proviso;
(2) “sold” includes a transfer by way of exchange or a compulsory acquisition under any law
for the time being in force but does not include a transfer, in a scheme of amalgamation, of any
asset by the amalgamating company to the amalgamated company where the amalgamated
company is 1[an Indian company or in a scheme of amalgamation of a banking company, as
referred to in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949) with a
banking institution as referred to in sub-section (15) of section 45 of the said Act, sanctioned and
brought into force by the Central Government under sub-section (7) of section 45 of that Act of
any asset by the banking company to the banking institution].]
2* * * * *
3* * * * *
4[(2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under
sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous
year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the
provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of
the allowance to which effect has not been given, as the case may be, shall be added to the amount of the
allowance for depreciation for the following previous year and deemed to be part of that allowance, or if
there is no such allowance for that previous year, be deemed to be the allowance for that previous year,
and so on for the succeeding previous years.]
“moneys payable” in respect of any building, machinery, plant or furniture includes—
any insurance, salvage or compensation moneys payable in respect thereof;
where the building, machinery, plant or furniture is sold, the price for which it is sold,
so, however, that where the actual cost of a motor car is, in accordance with the proviso to
clause
of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect
of such motor car shall be taken to be a sum which bears to the amount for which the motor car is
sold or, as the case may be, the amount of any insurance, salvage or compensation moneys
payable in respect thereof (including the amount of scrap value, if any) the same proportion as the
amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as
it would have been computed before applying the said proviso;
“sold” includes a transfer by way of exchange or a compulsory acquisition under any law
for the time being in force but does not include a transfer, in a scheme of amalgamation, of any
asset by the amalgamating company to the amalgamated company where the amalgamated
company is 1[an Indian company or in a scheme of amalgamation of a banking company, as
referred to in clause
of section 5 of the Banking Regulation Act, 1949 (10 of 1949) with a
banking institution as referred to in sub-section
of section 45 of the said Act, sanctioned and
brought into force by the Central Government under sub-section
of section 45 of that Act of
any asset by the banking company to the banking institution].]
2* * * * *
3* * * * *
4[
Where, in the assessment of the assessee, full effect cannot be given to any allowance under
sub-section
in any previous year, owing to there being no profits or gains chargeable for that previous
year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the
provisions of sub-section
of section 72 and sub-section
of section 73, the allowance or the part of
the allowance to which effect has not been given, as the case may be, shall be added to the amount of the
allowance for depreciation for the following previous year and deemed to be part of that allowance, or if
there is no such allowance for that previous year, be deemed to be the allowance for that previous year,
and so on for the succeeding previous years.]