REGISTERED No. D-28
Indra
Gevertexaru
291
The Gazette of India
EXTRAORDINARY
PUBITSIIID BY AUTHORITY
NEW DELHI , SATURDAY , SEPTEMBER 3 , 1949
GOVERNMLVI 01 INDIA
CENTRAL BOARD OF REVENUE
INCOMI TA
New Dete the nd September 1949
No. 87 .-- the tollowing draft of certam Rules which its proposed to make m excuse of the powers contened by section 150 and subsection ( 1) of section 29 of the Indru Income tam Act 1922 ( XI of 1922 ) 15 published as requned by sub section ( 1 ) of the said seethon 39 for the mlongation of all pet sons itke v to be affected thereby and notice is hereby given that the said draft will be taken nido consideration on after the 20th September 1949
Aus objection or suggestion which may be rece ved from any jcison with tuspect to the said drait before the storesaid date will be considered by the Central Board of Revelue
DRAFF RULES
anda alny for the Rules for the computation of capital comployet in purposes of section 15t of the Indian Income tax fc7 1922
1 These rules may be called the Iudian Income tax ( Computation of apital of Industrial Undertakings) Luler 1949
2 In these Rules -
( 1) Act means the Indian Income tax Act 1922 (XI of 1922 ) ,
( 1) Average cost m relation to any asset means such proportion of the actual cost thereol as the number of days of the computation period during which such asset is used in the business bears to the total number of days comprised in the said period ,
(11) Computation period umeans the penod for which the profits and gams of the unde taking and computed under section 10 of the Act
( 11) Depreciation means the allowance admissible under clauses ( vi) and ( vis ) of sub section (2) of sect on 10 of the Act ,
(v) Antien down value means the witten down value computed under sub section ( 5) of section 10 of the Act as if for the words
1825 1526
" previous yенг " substituted . the words ' computation period " were
3 (1 ) For the purpose of section 150 of the let , the capital employed in an undertaking to which the sand section apphes shall le taken to be-
(a) in the case of assets acquired by punchase and entitled to depreciation
( i) if they have been acquired before the computation period , ther written -down value on the commening date the said period:
( in) if they have been acquired on or after the commenong date of the computation period , their average cost dung the said period;
(b) In the case ot assets acquired by purchase and not entitled to depreciation-
() if they have been acquired before the computation period , their nctual cost to the assessee ;
( ii) if they have been acquired on or after the commencing date of the computation period , their average cost during the said period.
(e) na the case of assets being debts due to the person carrying on the business , the nominal amounts of those debts subject to the deductions hereinafter mentioned ;
(d) in the case of any other assets the value of the assets when they became assets of the business provided that if any such asset has been acquired within the computation period , only the average of such value shall be taken in the same manner average cost is to be computed . as A
(2) Where the price of any asset has been satisfied otherwise than in cash , the then value of the consideration actually given for the asset shall be treated as the price at which the asset was acquired .
(3) Any borrowed money and debt due by the person carrying on the business shall be deducted and in particular there shall be deduc- ted any debts incurred in respect of the business for income tax and super - tax or business profits tax or for advance payments due under any provision of the Indian Income- tax Act , 1922 or for any quin payable in relation to business profits tax under section 13 of the Business Profits Tax Act , 1947 ( XXI of 1947) .
Provided that any such debt for income - tax or super - tax or business profits tax shall , for the purpose of this sub - rule , be deemed to have become due--
(a) in the case of income - tax and super - fax on the last day of the period of time within which the tax is pavable under section 45 of the Act;
( b) in the case of business profits tax on the first day after the end of the chargeable accounting period in respect of which the tax is assessable notwithstanding that the business profits tax may rot have been assessed until after that date;
( c) in the case of any advance payment due under any provision of the Act or of any provisional tax paid under section 23B of the Act , -293 on the date on which , under the provision of section 45 of the Act , the payment fist became due ;
(4) Where any debt for business profits tax assessable in respect of any period is to be deducted under this mule the amount thereof shall not be reduced as a result of any relief to be givenin respect of a deficiency of profits accrung in any subsequent period , and the amount of such rehef shall be treated as having become an asset of the business on the first day atter the end of the chargeable accounting period in which the deficiency occurred
(5) Any investments the income from which is not to be taken into account in computing the profits of the business and any moneys not required for the purposes of the business , shall be left out of account , but where any investments in the beneficial ownership of the person carrying on the business are so left out of account , the sum ( if any ) to be deducted under sub -mule ( 3) in respect of bor- rowed money shall be computed as if the principal of the borrowed money were reduced by the value of those investments .
(6) For the purpose of ascertaining the average amount of capital employed in a business during any computation period , the profits or losses made in ' hat period shall , except so far as the contrary is shown , be deemed-
(a) to have accrued at an even rate throughout the said period ; and
or (b) to have resulted , as they accrued , in a corresponding increase decrease , as the case may be , in the capital emp'oyed in the business .
4. In case of any doubt in the interpretation or application of these rules and in particular where there is any difficulty in computing the capital employed in respect only a part of an undertaking the decision of the Central Board of Revenue shall be final .
S. P. LAHIRI . Secretary , Central Board of Revenue .
PUBLISHED BY THE MANAGER OF PUBLICATIONS . DELHI , INDIA PRINTED BY THE MANAGER , GOVERNMENT OF INDIA PRESS . NEW DELHI , INDIA