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10. Amendment of section 43. |
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—In section 43 of the Income-tax Act, in clause (6), after Explanation 5, the following Explanation shall be inserted and shall be deemed to have been inserted, with effect from the 1st day of April, 2003, namely:—
"Explanation 6.—Where an assessee was not required to compute his total income for the purposes of this Act for any previous year or years preceding the previous year relevant to the assessment year under consideration,—
(a) the actual cost of an asset shall be adjusted by the amount attributable to the revaluation of such asset, if any, in the books of account;
(b) the total amount of depreciation on such asset, provided in the books of account of the assessee in respect of such previous year or years preceding the previous year relevant to the assessment year under consideration shall be deemed to be the depreciation actually allowed under this Act for the purposes of this clause; and
(c) the depreciation actually allowed under clause (b) shall be adjusted by the amount of depreciation attributable to such revaluation of the asset.".
Clause 10 seeks to amend section 43 of the income-tax Act relating to definition of certain terms relevant to income from profits and gains of business or profession.
Sub-clause (b) of clause (6) of the said section provides that written down value in the case of assets acquired before the previous year means the actual cost to the assessee less all depreciation actually allowed to him under this Act, or under the Indian Income-tax Act, 1922, or any Act repealed by that Act, or under any executive orders issued when the Indian Income-tax Act, 1886, was in force.
It is proposed to insert Explanation 6 in the said clause (6) to provide that where an assessee was not required to compute his total income for the purposes of Income-tax Act for any previous year or years preceding the previous year relevant to the assessment year under consideration,-
(a) the actual cost of an asset shall be adjusted by the amount attributable to the revaluation of such asset, if any, in the books of account;
(b) the total amount of depreciation on such asset provided in the books of account of the assessee in respect of such previous year or years preceding the previous year relevant to the assessment year under consideration shall be deemed to be the depreciation actually allowed under the Income-tax Act for purposes of clause (6) of the said section;
(c) the depreciation actually allowed as above shall be adjusted by the amount of depreciation attributable to such revaluation.
This amendment will take effect retrospectively from 1st April, 2003 and will accordingly apply in relation to assessment year 2003-04 and subsequent assessment years.
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