Amendment of section 32AB

Section 7 of the Finance Act, 1987 deals with amendment of section 32AB. Amendment of section 32AB 7. In section 32AB of the Income-tax Act,— (a) in sub-section (1),— (i) for the words "deduction of", the words;

Amendment of section 32AB

7. In section 32AB of the Income-tax Act,—

(a) in sub-section (1),—

(i) for the words "deduction of", the words; brackets and figures "deduction (such deduction being allowed before the loss, if any, brought forward from earlier years is set off under section 72) of" shall be substituted;

(ii) the following proviso shall be inserted at. the end. namely: —

"Provided that where such assessee is a firm, or any association of persons or any body of individuals, the deduction under this section shall not be allowed in the computation of the income of any partner, or as the case may be, any member, of such firm, association of persons or body of individuals.";

(b) in sub-section (2)for clause (ii), the following clauses shall be substituted, namely:—

'(ii) "new ship" or "new aircraft" includes a ship or aircraft Which before the date of acquisition by the assessee was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in India;

(iii) "new machinery or plant'' includes machinery or plant which before its installation by the assessee was used outside India by any other person,, if the following conditions are fulfilled, namely: —

(a) such machinery or plant was not, at any time previous to the date of such 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 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 assesses;

(iv) "Tea Board" means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953);';

(c) in sub-section (3) in clause (a), for he words "as increased by an amount equal to the depreciation, if any, debited in the audited profit and loss account; and", the following shall be substituted, namely: —

"as increased by the aggregate of—

(i) the amount of depreciation;

(ii) the amount of income-tax paid or payable and provision therefor;

(iii) the amount of surtax paid of payable tinder the Companies (Profits) Surtax Act, 1964 (7 of 1964);

(iv) the amounts carried to any reserves, by whatever name called;

(v) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities:

(vi) the amount by way of provision for losses of subsidiary companies; and

(vii) the amount or amounts of dividends paid or proposed,

if any debited to the profit and loss account: and as reduced by any amount or amounts withdrawn from reserves or provisions, if such amounts are credited to the profit and account; and":

(d) after sub-section (5), the following sub-section shall be inserted, namely:—

(5A) Any amount standing to the credit of the assessee in the deposit account shall not be allowed to be withdrawn before the expiry of a period, of five years from the date of deposit except for the purposes specified in the scheme and in the circumstances specified below:—

(a) closure of business;

(b) death of an assessee;

(c) partition. of a Hindu undivided family;

(d) dissolution of a firm;

(e) liquidation of a company.

(5B)Where any amount standing to the credit of the assessee in the deposit account is utilised by the assessee for the purposes of any expenditure in connection with the eligible business or profession in accordance with the scheme, such expenditure shall not be allowed in computing the income chargeable under the head "Profits arid gains of business or profession"

(e) in sub-section (6),—

(i) for the words "is not utilised in accordance with the scheme" the words "is not utilised in accordance with the scheme" the "is not utilised in accordance with, and within the time specified in, the scheme" Shall be Substituted;

(ii) the words "within that previous year," shall be omitted.

[Finance Act, 1987]

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Section 7, The Finance Act, 1987 (Act 11 of 1987).