Clause 38 - Certain sums deemed as profits and gains of business or profession.

Deemed business income taxable when prior deductions are reversed or recoveries occur under specified statutory conditions.

Certain sums are deemed to be profits and gains of business or profession where earlier allowances or deductions are reversed or where asset realisations exceed written down value. Inclusions include remission or cessation of trading liabilities or amounts obtained in respect of previously deducted losses, excess on sale or disposal of tangible assets over written down value, proceeds from sale of unused capital research assets exceeding capital expenditure, recoveries of bad debts previously deducted, and withdrawals from previously allowed special reserves. Conditions require prior allowance, business use and claimed depreciation, and non repurposing of research assets.