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REGISTERED No. D- 28

The Gazette of India

EXTRAORDINARY

PUBLISHED BY AUTHORITY

NEW DELHI, SATURDAY, DECEMBER 3, 1949

GOVERNMENT OF INDIA

MINISTRY OF FINANCE (REVENUE DIVISION)

ORDERS

New Delhi, the 3rd December, 1949.

No. 22(40)-I.T./49.—The following Order made by the Central Government

is published for general information:—-

THE MERGED STATES (TAXATION CONCESSIONS) ORDER, 1949

In exercise of the powers conferred by section 60A of the Indian Income-tax Act, 1922 (XI of 1922) and section 23A of the Business Profits Tax Act, 1947 (XI of 1947) the Central Government is pleased to make the exemptions, reduc- tions in rate of tax and the modifications specified in this Order.

2. This Order may be cited as the Merged States (Taxation Concessions) Order, 1049.

3. In this Order—

(i) the 'Ordinance' means the Taxation Laws (Extension to Merged States) Ordinance, 1949;

(ii) the expression 'Indian rate of tax' means the rate determined by dividing the amount of income-tax and super-tax payable in British India on the total income for the year in question by the amount of such total income;

(iii) the expression 'Merged State rate of tax' means the rate determined by dividing the amount of income-tax and super-tax payable on the total income according to the rates of tax in force in the merged State for the year in question by the amount of such total income.

Explanation.—Where there was no State law relating to charge of income-tax and super-tax, the merged State rate of tax shall bo deemed to bo nil;

(iv) the expression 'State law' means any law relating to income-tax, super-tax or business profits tax in force in the merged State immediately before the commencement of the Ordinance.

4. The provisions of paragraphs 5, 6, 9, 10 and 11 of this Order shall apply to only so much of the income, profits and gains included in the total income of an assessee as would, had he been resident in British India, have been exempt under clause (c) of sub-section (2) of section 14 of the Indian Income-tax Act, 1922, if the Ordinance had not been promulgated.

[ 2 6 2 3]

t". (1) The income, profits and gains of any previous year ending after the 31st day of March, 1948, which is a previous year—

(i) for the merged State assessment year 1948-4&; or (ii) for the merged State assessment year 1949-50,

shall be assessed under the Indian Income-tax Act, 1922, if, and only if, such income, profits and gains have not, before the 1st diry of August, 1949, been assessed under the btate law.

(2) Where the income, profits and gams referred to in sub-paragraph (1) huve not been assessed under the State law, they shall be assessed under the indiar Income-tax Aot, 1922, and the tax payable thareon shall be determined 'is hereunder—

(i) the tax on the amount of suoh income, profits and gains incluled in the total income shall be computed at the Indian rate of tux;

(ii) the amount of such income, profits and gains shall be computed under the State law and the tax thereon computed at the merged Btate rate of tax;

(iii) the amount, if any, by whiteh the tax computed under clause (i) exceeds the tax computed under clause (ii) shall be allowed as rebate from the first mentioned tax, and the amount of the first mentioned tax us so reduced,shall be the tax payable

(8) For the purposes of this paragraph-

fa) the merged State assessment year 1948-40 means the assessment year which commences on any date between the 1st April, 194ft and the 131st December 1948, both dates inclusive, and

(b) the merged State assessment year 1949-50 means the assessment year which commences on any date between the 2nd January, 1949 and the 31st July 1949 both dates inolusive.

"j. (1) The income, profits and gains of any previous year commencing after flic previous year referred to in paragraph five of this Orler shall be assessed under the Indian Income-tax Act, 10122, but the tax payable on so much of the income an pertains to the period ondinj> before the 1st day of August, 1049, shall be determined as hereunder—

(i) the ta.v on so much of such income included in the total income shall be computed (a) nt the Indian rate of tax and (b) at the rates of. tax in force in the merged State immediately before the 1st day of August 1040;

(ii) the amount by which the lax computed under sub-clause (a) of clause (i) exceeds the tax computed under sub-clause (b) of clause (i) shall be allowed as rebate from the first mentioned tax, and the amount of the first mentioned tax us so reduced shall be the tax payable.

(2) Where any previous year falls partly before anl paitty on or after the 1st day of August, 1949, the income, profits and gains pertaining to the period falling before (he said date shall, unless the Income-tax Officer, having regard to any special circumstances, otherwise directs with the approval of the Inspecting A-itiisiant Commissioner of Income-tax, be in ilie proportion uhir-h the period before the snid date bears to the whole previous year.

7. (1) Where, before the commencement of the Ordinance, any income has be"ii assessed in the merged State and also in British .Indin, double income-tax relief which would have been n,lrrrissibl<< in British Fndia under tbe Tneome- tax (Double Taxation Belief) (Indian States) llules, 1930 and in the meiged RfanV under the corresponding Eules shall bo allowed.

(2) Where, before the commencement of the Ordinance airy income accruing or arising before the 1st day of August, 1040, has been assessed in the merged State or in British India, and the whole or part of such income is also assess- able in British India or the naorged State, as the case may be, the tax payable in respect of the assessment to be made shall bo reduced by the amount of double inoome-tax relief which would have been allowable in accordance with nub-paragraph (1).

8 (1) Notwithstanding anything contained in Explanation A to sub-section (I) of section 4 ot the Indian Income-tax Act, 1922, the income, profits and gains brought into or received in any part of British India other than the merged State, after the 81st day of' July 1949, shall not be charged te tax a" income of the frevious year in which they are so brought' or received except where—

(i) the arisessee is a person who has been assessed, or is assessable in British India as resident tor three out of six years of assess- ment commencing on the 1st day of April, 1043, and ending on the 81st day of March, 1940; and

(lij such income, profits and gains—

(a) being assessable in the merged State had not been assessed; or (b) being liable to be inoluded in British India in the 'total income' of the relevant year under the provisions of the Indian Income- tax Act, 1922, had not been included.

(2) where the income, profits and gains referred to in Kub-paragruph (1) nre chargeable as the income of the previous year, in accordance with the pro- visions of that sub-paragraph, the tax payable thereon shall be determined as Uereunder—

(i) the tax payable on the amount of guch income^ profits and gains in- cluded in the total income shall be computed at the Indian rate of tax;

(ii) the tax payablo in the merged State in the relevant year in winch such income, profits and gains were assessable shall, if not already assessed, be computed at the merged State rate of tax;

(iii) the tax payable in British India in the relevant year in which such income, profits and gains were assessable shall, if not already asscssod, be computed at the Indian rate of tax;

(iv) the sum of the taxes payable under clauses (ii) and (iii) shall bo reduce-1 by the amount of the double income-tax relief, if any, which would have been allowable in accordance with sub-para- graph (1) of paragraph 7;

(v) the amount by which the tax computed under clause (i) exceeds the tax computed under clause (iv) shall be allowed as a rebate from the first mentioned tax, and the amount of the first mentioned tax as BO reduced shal] be the tax payable.

0. Where the total income of any previous year ending on or after tho 1st day of April, 1948, includes any income under tho head capital gains uriaing before the said date, such capital gains shall not be charged to tax under the Indiai Income-tax Act. 1922, unless the State law contains a provision corres- ponding to section 12B of the said Act. Where such capital gains are charge- able to tax, the computation of tax shall be subject to the provision of pamtmmh fh'o of this Order,

°

10. En computing the total income of an assessee for any period before the 1st day of August, 1949, for the purposes of paragraphs five and six of this Order, the provisions of clause (c) of subjection (1) and of sub-section (8) of

spetiui, 16 of the Indian Income-tax Act, 1922, shall not be applied unless the State Law contains provisions corresponding thereto.

11 (1) The provisions of section IB A ot the lndiuu Income-tax Act regarding the advance payment of tax shall not bp applied in the year ending on the fllst >day of March, 1950, in respect of tiny income accruing or arising in a merged ^ t a te unless the State Law contains n provision coi responding theieto

(2) Where the piovsions ot Section J8A ot the Indian Income-tax Act are nppli( able in the year ending on the tJJnt d"v ot March, 1950, or uny subsequent year the expression "latest previous year in respect of which he has been assessed" in clause (a) of sub-section (1) of tho eaid section shall be •deemwl to mean the latest previous year in respect oi which he has been assessed either in tin¹ merged State or in Brit sh India or in both, as the case nuiy be

Provided that wheio the income ot the Litest previous year in respect ot which a person has been assessed in the State and in British India is to be taken in aggregate for the purposes of this pnrngraph, so much of buoh income as has been included in both the assessment? should be excluded froiri the aggregate.

12. Tho provisions ol soction !23A of the Indian Income-tax Act, shall not tie applied in respect of Ihe profits and gains of any previous vear ending before the 1st dny of August, 1949, unless- the State haw contains a provision corres- ponding thereto,

13 Any inpoim fulling within the lolloping i lasses shnll lie exempt tiom income-tax and super-tax and shall not be included in tho total income or total world income of the person receiving Incur

(i) The privy purse of the Buler ot a merge I State

fii) Any sum which lhL. mother or the lather s mother of the person who was a Euler of a merged State before the 1st day of August, 1949, reeeHes as her maintenance allowance out of public revenues, for so long as such allowance is received by her in the merged State and is not brought into or received in any part of British Tndin.

>(iii) Any pension paid out of public revenues which a person receives as the subordinate chief of tho Buler of a merged State where such pension WHS payable to him in that capacity by the Ruler immediately before the lsl djy ot August, 1040. L/

14. Nn business profits tax shall be payable under the Business Profits Tax Act, 1047, in respect of such profits nrishig in any accounting period falling within the year ending on the 31st dny of March, 1949, as are exempt under the hf eond proviso to section fi of the said Act, unless, immediately before the commencement of the Ordinance, there was m force in the merged State any Jflw relating to the chargo of business piofitu tax If there was any such law, the btisin' ^s profits tax payable under the Business Profits Tax Act, 1947. shall be reduced so as not to exceed the tax that would have been payable if the profits were computed and the tax charged in accordance with the merge 1 State Law.

I) (1) Whrro iinv industr al undertaking situate in a merged State claims that it has been granted any exemption from or concession in respect of income- lax, super-tax or business profits t.<\~ by the Ruler of the State before tho 1st

ma iqAzftflxs --<&- -JMOJ^ *2acB^.ttm.i*Afl¥ $&& im, m?

day oJt August, 1949, it shall submit an application to tha Gommi&fliQiiw of lii"oine-tax giving the following particulars: —

1. Name of the industrial undertaking, D. Status (i.e. whether public or private company, iirm., individual or

•Hindu undivided ±mniiy.)

B. Nature ol the business. 4. Date of commencement ot th0 business. 5. Mature ot the concessions granted. 0. period for whioh concessions granted. 7. Unexpired period oi the concessions from 1st day of August, 1949.

(U) The application shall be accompanied by a oopy of the orders of the titaJt granting the concession or ot the agreement witn the ftfcate.

(#) The Commissioner shall, after obtaining such other information as h© may require, forward the application to the Central Government which, having regard to oil the circumstances of the case1 may grant such relief, if any, as is thinks appropriate.

No. 22(4O)-I.T./49.—The following Order made by the Central Government is published tor general miomiation:—

TAXATION LAWS (MEBGED (STATES) (BEMOVAL OF DIFFICULTIES) OBEEE, 1949

WHBHEAS certain difficulties have arisen in giving effect to ,the provisions of the Taxation Laws (Extension to Merged States) Ordinance, 1949 (No, XXI of 1949),

Now imtaKFoRE, in exercise of the powers oonferred by section 8 of the said Ordinance, the Central Government is pleased io make the following order, namely: —

1. This Order may be cited as the Taxation Laws (Merged States) (Bemoval of Difficulties) Order, 1949.

2. Computation of aggregate depreciation, allowance and the writUn-dcwn" value.—In making any assessment under the Indian Income-tax Act, 1922, all depreciation actually allowed under any laws or rulea of a merged State relating to income-.tax and super-tas, shall be taken into account in computing .the aggregate depreciation allowanco referred to in sub-clause (c) of the proviso to clause (vi) oi Bub-section 2, and the wxitton-down-value under clause (b) of sub-section 5, of section 10 of the said. Ao$:

Provided that whore in respect of any asset, depreciation has been allowed for any year both in the assessment made in the merged State and in British India, the greater of Che two suin& allowed shall only be taken into account.

fl. Treatment of property transferred in a merged state before payment of taxes.—Section 4 of the Payment of Taxes (Transfer of Property) Aot, 1949, shall not apply in relation to any property situate in a merged state which had been transferred before the 1st day of August, 1949, or before the date on which the Transfer of Property (Payment of TaxeB) Ordinance, 1948 (III of 1948), or the Payment of Taxes (Transfer of Property) Ordinance, 1948 (XXI of 1948), or the Payment of Taxes (Transfer of Property) Act, 1949 (XXII of 1949), .ae the case may be, was applied to the -merged state by an order under the Extra Provincial Jurisdiction Act, 1947.

P. C. PADHT, Addl. Secy.

ft"96 4PttE.-GW3Saffi5#"1-IIflW*; mT"&£>BPMJ*&¥ ©"0- ?,- M*9

CuHTOftfB

JVew DeZfa, f/ie 26th November 1949

No. 66.—In exercise of the Powers conferred by section 22 of the JSe" CUB toma Act, 1878 (VIII df 187B), the Central Government is pleased to fix, with effect from the 26th November 1949, the iollowmg tariff-value for Black pepper exported from the Provinces of India for the purpose of levying export duty thereon, namely —•

Tariff-value

Black pepper ... ... Bs. 900 per cwfc.

K. E. P. AiITANGAR, Joint 8®cy.

PniMTO BT TH" MANAGE, O o vt e N M MT or Im>w P u i o . ,^ ^, I N M^