Income Tax Act

Official PDF pages 91–95

SOURCE PDF PAGE 91
TABLE
Sl.
No.
Nature of specified business   Date of commencement of
operations being on or after
A   B   C
1.   Laying and operating a cross-country natural
gas pipeline network for distribution, including
storage facilities being an integral part of such
network.
1st April, 2007.
2.   Building and operating a new hotel of two star
or above category as classified by the Central
Government.
1st April, 2010.
3.   Building and operating a new hospital with
at least 100 beds for patients.
1st April, 2010.
4.   Developing and building a housing project
under a scheme for slum redevelopment
or   rehabilitation   framed   by   the   Central
Government or a State Government, and
which is notified by the Board in this behalf
in accordance with the guidelines as may be
prescribed.
1st April, 2010.
5.   Developing and building a housing project
under   a   scheme   for   affordable   housing
framed by the Central Government or a State
Government, and which is notified by the
Board in this behalf in accordance with the
guidelines as may be prescribed.
1st April, 2011.
6.   A new plant or a newly installed capacity in
an existing plant for production of fertilizer.
1st April, 2011.
7.   Setting up and operating an inland container
depot or a container freight station notified
or approved under the Customs Act, 1962 (52
of 1962).
1st April, 2012.
8.   Bee-keeping and production of honey and
beeswax.
1st April, 2012.
9.   Setting up and operating a warehousing
facility for storage of sugar.
1st April, 2012.
10.   Laying and operating a slurry pipeline for the
transportation of iron ore.
1st April, 2014.
11.   Setting up and operating a semi-conductor
wafer fabrication manufacturing unit, and
which is notified by the Board in this behalf
in accordance with the guidelines as may be
prescribed.
1st April, 2014.

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Sl.
No.
Nature of specified business   Date of commencement of
operations being on or after
A   B   C
12.   Developing, or operating and maintaining, or
developing, operating and maintaining, any
infrastructure facility.
1st April, 2017.
13.   In all other cases.   1st April, 2009.
(7) Where the assessee builds a hotel of two star or above category as classified by
the Central Government and subsequently, transfers the hotel operation thereof to
another person while retaining its ownership, the assessee shall be deemed to be
carrying on the specified business referred to in sub-section (11)( d )( iv ).
(8) The provisions contained in sections 122(6) and 140(8) and (13) shall, so far as
may be, apply to this section in respect of goods or services or assets held for the
purposes of the specified business.
(9) Any asset for which a deduction is claimed and allowed under this section—
( a )   shall be used only for the specified business for a period of eight
years beginning with the tax year in which such asset is acquired or
constructed;
( b )   is used for the purpose other than specified business during the period
referred to in clause ( a ), and is not chargeable to tax under section 26(2)
( k ), then the total amount of deduction so claimed and allowed in one
or more tax years, as reduced by the amount of depreciation allowable
under section 33, as if no deduction under this section was allowed, shall
be deemed to be the income chargeable under the head “Profits and gains
of business or profession” of the tax year in which the asset is so used.
(10) The provisions of sub-section (9)( b ) shall not apply to a company which has
become a sick industrial company under section 17(1) of the Sick Industrial Com -
panies (Special Provisions) Act, 1985 (1 of 1986), as it stood before its repeal by the
Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (1 of 2004) during
the period specified in sub-section (9)( a ).
(11) For the purposes of this section,—
( a )   “associated person”, in relation to the assessee, means a person,—
( i )   who participates, directly or indirectly, or through one or more
intermediaries in the management or control or capital of the
assessee;
( ii )   who holds, directly or indirectly, shares carrying at least 26% of the
voting power in the capital of the assessee;
( iii )   who appoints more than half of the board of directors or mem -
bers of the governing board, or one or more executive directors or
executive members of the governing board of the assessee; or
( iv )   who guarantees at least 10% of the total borrowings of the assessee;

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( b )   “cold chain facility” means a chain of facilities for storage or trans -
portation of agricultural and forest produce, meat and meat products,
poultry, marine and dairy products, products of horticulture, floriculture
and apiculture and processed food items under scientifically controlled
conditions including refrigeration and other facilities necessary for the
preservation of such produce;
( c )   “infrastructure facility” means—
( i )   a road including toll road, a bridge or a rail system;
( ii )   a highway project including housing or other activities being an
integral part of the highway project;
( iii )   a water supply project, water treatment system, irrigation pro -
ject, sanitation and sewerage system or solid waste management
system;
( iv )   a port, airport, inland waterway, inland port or navigational channel
in the sea;
( d )   “specified business” means any one or more of the following businesses:—
( i )   setting up and operating a cold chain facility;
( ii )   setting up and operating a warehousing facility for storage of
agricultural produce;
( iii )   laying and operating a cross-country natural gas or crude or
petroleum oil pipeline network for distribution, including storage
facilities being an integral part of such network;
( iv )   building and operating, anywhere in India, a hotel of two star or
above category as classified by the Central Government;
( v )   building and operating, anywhere in India, a hospital with at least
100 beds for patients;
( vi )   developing and building a housing project under a scheme for slum
redevelopment or rehabilitation framed by the Central Government
or a State Government and which is notified by the Board in this
behalf in accordance with the guidelines as may be prescribed;
( vii )   developing and building a housing project under a scheme for
affordable housing framed by the Central Government or a State
Government and which is notified by the Board in this behalf in
accordance with the guidelines as may be prescribed;
( viii )   production of fertilizer in India;
( ix )   setting up and operating an inland container depot or a container
freight station notified or approved under the Customs Act, 1962
(52 of 1962);
( x )   bee-keeping and production of honey and beeswax;
( xi )   setting up and operating a warehousing facility for storage of sugar;

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( xii )   laying and operating a slurry pipeline for the transportation of iron
ore;
( xiii )   setting up and operating a semi-conductor wafer fabrication man -
ufacturing unit which is notified by the Board in this behalf in
accordance with the guidelines as may be prescribed;
( xiv )   developing, or maintaining and operating, or developing, maintain -
ing and operating, a new infrastructure facility;
( e )   any machinery or plant which was used outside India by any person other
than the assessee shall not be regarded as machinery or plant previously
used for any purpose, if—
( i )   such machinery or plant was not, at any time before the date of the
installation by the assessee, used in India;
( ii )   such machinery or plant is imported into India; and
( iii )   no deduction of depreciation for such machinery or plant has been
allowed or is allowable under the provisions of this Act in comput -
ing the total income of any person for any period before the date
of installation of the machinery or plant by the assessee;
( f )   if any machinery or plant or its part previously used for any purpose is
transferred to the specified business and its total value does not exceed
20% of the total value of the machinery or plant used in such business,
then the conditions specified in sub-section (3)( b ) shall be deemed to be
complied with;
( g )   any expenditure of capital nature shall not include any expenditure—
( i )   for which the payment or aggregate of payments made to a person
in a day, is not through specified banking or online mode, exceeds
`   10000; or
( ii )   incurred on the acquisition of any land or goodwill or financial
instrument.
Expenditure on agricultural extension project and skill development project.
47.   (1) Any expenditure (excluding cost of any land or building) incurred, on—
( a )   agricultural extension project by any assessee; or
( b )   any skill development project by a company,
shall be allowed as a deduction, in the tax year in which such expenditure is incurred
provided such project is notified by the Board as per the guidelines issued by it.
(2) If a deduction under this section is claimed and allowed for any tax year in
respect of any expenditure referred to in sub-section (1), deduction shall not be
allowed for such expenditure under any other provision of this Act for the same or
any other tax year.
Tea   development   account,   coffee   development   account   and   rubber
development account.
48.   (1) Where an assessee is carrying on business of growing and manufac-
turing tea or coffee or rubber in India, such assessee shall be allowed a

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deduction on the basis of deposits into the special account or deposit account
and computed as per the provisions of the Schedule IX.
(2) Any amount withdrawn or utilised or released from the aforesaid accounts at
the time of closure or otherwise shall be charged to tax as per the provisions of the
Schedule IX.
(3) Where any asset acquired as per the special scheme or the deposit scheme, as
referred to in the Schedule IX, is sold or otherwise transferred in any tax year, it
shall be charged to tax in accordance with the provisions of the said Schedule.
Site Restoration Fund.
49.   (1) An assessee carrying on a business of prospecting, extracting, or producing
petroleum or natural gas, or both, in India, and who has an agreement with
the Central Government for this business, shall be allowed a deduction on the basis
of deposit to special account or site restoration account and computed as per the
provisions of the Schedule X.
(2) Any amount withdrawn or transferred from the aforesaid accounts at the time
of closure or otherwise shall be charged to tax in the year in which the amount is
transferred or withdrawn as per the provisions of the Schedule X.
(3) Where any asset acquired as per the special scheme, or the deposit scheme, as
referred to in Schedule X, is sold or otherwise transferred in any tax year, it shall
be charged to tax in accordance with the provisions of the said Schedule.
Special provision in case of trade, profession or similar association.
50.   (1) Irrespective of anything to the contrary contained in this Act, if, during
the tax year, the amount received by a specified association from its members
falls short of the expenditure incurred by such association solely for the protection
or advancement of common interest of its members, then the amount so falling
short shall be allowed as deduction from the income of such association under the
head “Profits and gains of business or profession” and the remaining amount, if
any, shall be allowed deduction from its income under any other head.
(2) For the purposes of sub-section (1),—
( a )   “specified association” means any trade, professional or similar associ -
ation, not covered in Schedule III (Table: Sl. No. 24), whose income or
its part is not distributed to its members (other than as grants to any
associations or institutions affiliated to it);
( b )   the amount received by the specified association from its members shall
include amount by way of subscription or otherwise, and shall not include
any remuneration received by the association for rendering any specific
services to such members;
( c )   expenditure incurred by specified association shall not include—
( i )   expenditure deductible under any other provision of this Act; and
( ii )   any capital expenditure.
(3) The effect of other provisions of this Act relating to carry forward and set off
of brought forward losses or allowances shall be given before allowing deduction
under sub-section (1).