India - Income Tax Act 2010 - Saarc

1.177 CH. IV - COMPUTATION OF BUSINESS INCOME S. 32Asufficient to reduce the total income of the assessee assessable forthat assessment year, computed in the manner aforesaid, to nil, andthe balance of the investment allowance, if any, still outstanding shallbe carried forward to the following assessment year and so on, so,however, that no portion of the investment allowance shall be carriedforward for more than eight assessment years immediately succeedingthe assessment year relevant to the previous year in which the shipor aircraft was acquired or the machinery or plant was installed or,as the case may be, the immediately succeeding previous year.Explanation.—Where for any assessment year, investment allowance is to beallowed in accordance with the provisions of this sub-section in respect of anyship or aircraft acquired or any machinery or plant installed in more than oneprevious year, and the total income of the assessee assessable for that assessmentyear (the total income for this purpose being computed after deduction of theallowances under section 33 and section 33A, but without making any deductionunder sub-section (1) of this section or any deduction under Chapter VI-A) is lessthan the aggregate of the amounts due to be allowed in respect of the assetsaforesaid for that assessment year, the following procedure shall be followed,namely :—(a) the allowance under clause (ii) shall be made before any allowanceunder clause (i) is made; and(b) where an allowance has to be made under clause (ii) in respect ofamounts carried forward from more than one assessment year, theamount carried forward from an earlier assessment year shall beallowed before any amount carried forward from a later assessmentyear.(4) The deduction under sub-section (1) shall be allowed only if the followingconditions are fulfilled, namely :—(i) the particulars prescribed in this behalf have been furnished by theassessee in respect of the ship or aircraft or machinery or plant;(ii) an amount equal to seventy-five per cent of the investment allowanceto be actually allowed is debited to the profit and loss account of 33 [anyprevious year in respect of which the deduction is to be allowed undersub-section (3) or any earlier previous year (being a previous year notearlier than the year in which the ship or aircraft was acquired or themachinery or plant was installed or the ship, aircraft, machinery orplant was first put to use)] and credited to a reserve account (to becalled the “Investment Allowance Reserve Account”) to be utilised—(a) for the purposes of acquiring, before the expiry of a period of tenyears next following the previous year in which the ship oraircraft was acquired or the machinery or plant was installed, anew ship or a new aircraft or new machinery or plant [other thanmachinery or plant of the nature referred to in clauses (a), (b) and33. Substituted for “the previous year in respect of which the deduction is to be allowed” bythe Finance Act, 1990, w.r.e.f. 1-4-1976.