TaxTMI 
TaxTMI 
Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.
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....oviding telecommunication service or develops an industrial park 3[or develops 4[****] a special economic zone referred to in clause (iii) of sub-section (4)] or generates power or commences transmission or distribution of power 5[or undertakes substantial renovation and modernisation of the existing transmission or distribution lines 6[****]] : 7[Provided that where the assessee develops or operates and maintains or develops, operates and maintains any infrastructure facility referred to in clause (a) or clause (b) or clause (c) of the Explanation to clause (i) of sub-section (4), the provisions of this sub-section shall have effect as if for the words "fifteen years", the words "twenty years" had been substituted.] 8[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), the deduction in computing the total income of an undertaking providing telecommunication services, specified in clause (ii) of sub-section (4), shall be hundred per cent of the profits and gains of the eligible business for the first five assessment years commencing at any time during the periods as specified in sub-section (2) and thereafter, thirty per cent of such profits and ga....
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....complied with. (4) This section applies to- (i) any enterprise carrying on the business 17[of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining] any infrastructure facility which fulfils all the following conditions, namely :- (a) it is owned by a company registered in India or by a consortium of such companies 18[or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act;] 19[(b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility;] (c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995: Provided that where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (hereafter referred to in this section as the transfer or enterprise) to another enterprise (hereafter in this section referred to as the tr....
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....c zone, as the case may be, to another undertaking (hereafter in this section referred to as the transferee undertaking), the deduction under sub-section (1) shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee undertaking : 27[Provided further that in the case of any undertaking which develops, develops and operates or maintains and operates an industrial park, the provisions of this clause shall have effect as if for the figures, letters and words "31st day of March, 2006", the figures, letters and words "[31st day of March, 2011]" had been substituted;] (iv) an 28[undertaking] which,- (a) is set up in any part of India for the generation or generation and distribution of power if it begins to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on 55[the 31st day of March, 2017]; (b) starts transmission or distribution by laying a network of new transmission or distribution lines at any time during the period beginning on the 1st day of April, 1999 and ending on 56[the 31st day of March, ....
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....ame is actually utilised for the highway project excluding housing and other activities before the expiry of three years following the year in which such amount was transferred to the reserve account; and the amount remaining unutilised shall be chargeable to tax as income of the year in which such transfer to reserve account took place. (7) 36[The deduction] under sub-section (1) from profits and gains derived from an 37[undertaking] shall not be admissible unless the accounts of the 38[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, 59[before the specified date referred to in section 44AB and the assessee furnishes by that date], the report of such audit in the prescribed form duly signed and verified by such accountant. (8) Where any goods 39[or services] held for the purposes of the eligible business are transferred to any other business carried on by the assessee, or where any goods 40[or services] held for the purposes of any other business carried on by the assessee are transferred to the eligible business and, i....
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....d 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. 49[(12A) Nothing contained....
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....ly in respect of an industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose; (iii) it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India : Provided that the condition in this clause shall, in relation to a small scale industrial undertaking or an industrial undertaking referred to in sub-clause (b) of clause (iv) which begins to manufacture or produce an article or thing during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 2000, apply as if the words "not being any article or thing specified in the list in the Eleventh Schedule" had been omitted; (iv) (a) in the case of an industrial undertaking not specified in sub-clause (b) or sub-clause (c), it begins to ....
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....erson other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely :- (a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee. Explanation 2.-Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with. (3) This section applies to any ship, where all the followi....
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....) located in a place other than a place referred to in clause (iii) of this sub-section, starts functioning at any time during the period beginning on the 1st day of April, 1991 and ending on the 31st day of March, 1995; (iva) the business of the hotel, located in a place other than a place referred to in clause (iiia) of this sub-section and not being located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee, town area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi and Mumbai, starts functioning at any time during the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001; (v) the hotel is for the time being approved by the prescribed authority. (4A) This section applies to any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility which fulfils all the following conditions, namely :- (i) the enterprise is owned by a company registered in India or by a consortium of such companies; (ii) the enterprise has entered into an agreement with the Central Government or a State Go....
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....nt referred to in sub-section (1) shall be- (i) (a) in the case of an industrial undertaking referred to in sub-clause (a) or sub-clause (d) of clause (iv) of sub-section (2), twenty-five per cent of the profits and gains derived from such industrial undertakings; (b) in the case of an industrial undertaking referred to in sub-clause (b) or sub-clause (c) of clause (iv) of sub-section (2), hundred per cent of the profits and gains derived from such industrial undertaking for the initial five assessment years and thereafter twenty-five per cent of the profits and gains derived from such industrial undertaking : Provided that where the assessee is a company, the provisions of this clause shall have effect as if for the words "twenty-five per cent", the words "thirty per cent" had been substituted : Provided further that in case of an industrial undertaking located in an industrially backward district of Category B, the provisions of this clause shall have effect as if for the words "five assessment years", the words "three assessment years" had been substituted; (ia) in the case of an enterprise referred to in sub-section (4A), hundred per cent of the profits and gains deri....
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....erred to in sub-section (4E) hundred per cent of profits and gains derived from such business for the initial seven assessment years; (vi) in the case of a housing project referred to in sub-section (4F), hundred per cent of profits and gains derived from such business. (6) The number of assessment years referred to in sub-section (1) shall, including the initial assessment year, be- (i) twelve in the case of an assessee, being a co-operative society, deriving profits and gains from an industrial undertaking; (ii) ten in the case of an assessee, not being a co-operative society, deriving profits and gains from an industrial undertaking specified in sub-clause (a) or sub-clause (b) or sub-clause (d) of clause (iv) of sub-section (2) or located in an industrially backward district of Category A specified in sub-clause (c) of clause (iv) of that sub-section; (iia) eight in the case of an assessee deriving profits and gains from an industrial undertaking located in an industrially backward district of Category B specified in sub-clause (c) of clause (iv) of sub-section (2) and such an undertaking is not covered under clauses (i) and (ii) of this sub-section; (iii) ten....
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....ount and the same is actually utilised for the highway project excluding housing and other activities before the expiry of three years following the year in which such amount was transferred to the reserve account; and the amount remaining unutilised shall be chargeable to tax as income of the year in which transfer to reserve account took place. (8) 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. (9) Where any goods held for the purposes of the eligible business 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....
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....means a satellite owned and operated by an Indian company for providing telecommunication service; (aa) "hilly area" means any area located at a height of one thousand metres or more above the sea level; (b) "industrial undertaking" shall have the meaning assigned to it in the Explanation to section 33B; (c) "initial assessment year"- (1) in the case of an industrial undertaking or cold storage plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning; (2) in the case of an enterprise, carrying on the business of developing, operating and maintaining any infrastructure facility, means the assessment year specified by the assessee at his option to be the initial year, not falling beyond the twelfth assessment year starting from the previous year in which the enterprise begins operating and maintaining the infrastructure facility; (3) in the case of a company carrying on scientific and industrial research and development....
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.... other relevant considerations specify in this behalf by notification in the Official Gazette; (f) "small-scale industrial undertaking" means an industrial undertaking which is, as on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951 (65 of 1951); (g) "North Eastern Region" means the region comprising of the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura." Earlier, Inserted vide Section 32 of the Finance (No. 2) Act, 1991 w.e.f. 01-04-1991 And was Amended vide Section 47 of the Finance Act, 1992 w.e.f. 01-04-1993 And was Amended vide Section 15 of the Finance Act, 1993 w.e.f. 01-04-1994 And was Amended vide Section 27 of the Finance Act, 1994 w.e.f. 01-04-1994/01-04-1995 And was Amended vide Section 19 of the Finance Act, 1995 w.e.f. 01-04-1996 And was Amended vide Section 28 of the Finance (No. 2) Act, 1996 w.e.f. 01-04-1997 And was Amended vide Section 25 of the Finance Act, 1997 w.e.f. 01-04-1996/w.e.f. 01-04-1998 And was Amended vide Section 3 of the Income-tax (Amendment) Act, 19....
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....dustrial undertaking" 10. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "industrial undertaking" 11. Inserted vide Section 17 of the Finance (No. 2) Act, 2004 w.e.f. 01-04-2005 12. Omitted vide Section 36 of the Finance (No.2) Act, 2009 w.e.f. 01-04-2010 before it was read as, "or clause (vi)" Earlier, Inserted vide Section 28 of the Finance Act, 2007 w.e.f. 01-04-2008 13. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "industrial undertaking" 14. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "industrial undertaking" 15. Inserted vide Section 17 of the Finance (No. 2) Act, 2004 w.e.f. 01-04-2005 16. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "industrial undertaking" 17. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "of (i) developing, (ii) maintaining and operating or (iii) developing, maintaining and operat....
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....tion 44 of the Finance Act, 2001 w.e.f. 01-04-2001 before it was read as, "2002" 26. Substituted vide Section 38 of the Finance Act, 2003 w.e.f. 01-04-2002 before it was read as, "Provided that in a case where an undertaking develops an industrial park on or after the 1st day of April, 1999 and transfers the operation and maintenance of such industrial park to another undertaking (hereafter in this section referred to as the transferee undertaking) the deduction under sub-section (1), shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years in a manner as if the operation and maintenance were not so transferred to the transferee undertaking;" 27. Inserted vide Section 18 of the Finance Act, 2006 w.e.f. 01-04-2007 28. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "industrial undertaking" 29. Substituted vide Section 36 of the Finance (No.2) Act, 2009 w.e.f. 01-04-2009 before it was read as, "2010", Earlier, Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was re....
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....nbsp; "Where the assessee is a person other than a company or a co-operative society, the deduction" 37. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "industrial undertaking" 38. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "industrial undertaking" 39. Inserted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 40. Inserted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 41. Inserted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 42. Inserted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 43. Substituted vide Section 44 of the Finance Act, 2001 w.e.f. 01-04-2002 before it was read as, "Explanation.-For the purposes of 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." Earlier, Substituted vide Section 30 of the Finance Act, 2012 w.e.f. 01-04-2013 before it was read as, "Explanation.-For the purposes of....