Amendment of section 41

Section 18 of the Finance Act, 1992 deals with amendment of section 41. Amendment of section 41. 18. In section 41 of the Income-tax Act, for sub-section (7), the following sub-section shall be substituted, with effect from the 1st day of April, 1993, namely: — (1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditu

Amendment of section 41.

18. In section 41 of the Income-tax Act, for sub-section (7), the following sub-section shall be substituted, with effect from the 1st day of April, 1993, namely: —

(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred to as the " first-mentioned person) and subsequently during any previous year,—

(a) the first-mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the in come of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or

(b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mentioned person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year.

Explanation.—For the purposes of this sub-section, "successor in business" means,—

(i) where there has been an amalgamation of a company with another company, the amalgamated company;

(ii) where the first-mentioned person is succeeded by any other person in that business or profession, the other person;

(iii) where a firm carrying on a business or profession is succeeded by another firm, the other firm.'.

[Finance Act, 1992]

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Section 18, The Finance Act, 1992 (Act 18 of 1992).