India - Income Tax Act 2010 - Saarc

1.217 CH. IV - COMPUTATION OF BUSINESS INCOME S. 35AB(a) subtracting the proceeds of the sale (so far as they consist of capitalsums) from the amount of the cost of acquisition of the rightsremaining unallowed; and(b) dividing the remainder by the number of relevant previous yearswhich have not expired at the beginning of the previous year duringwhich the rights are sold.]23[(6) Where, in a scheme of amalgamation, the amalgamating company sells orotherwise transfers the rights to the amalgamated company (being an Indiancompany),—(i) the provisions of sub-sections (3) and (4) shall not apply in the case ofthe amalgamating company; and(ii) the provisions of this section shall, as far as may be, apply to theamalgamated company as they would have applied to the amalgamatingcompany if the latter had not so sold or otherwise transferredthe rights.]24[(7) Where in a scheme of demerger, the demerged company sells or otherwisetransfers the rights to the resulting company (being an Indian company),—(i) the provisions of sub-sections (3) and (4) shall not apply in the case ofthe demerged company; and(ii) the provisions of this section shall, as far as may be, apply to theresulting company as they would have applied to the demergedcompany, if the latter had not sold or otherwise transferred therights.]25[Expenditure on know-how.35AB. (1) Subject to the provisions of sub-section (2), where the assessee haspaid in any previous year 26 [relevant to the assessment year commencingon or before the 1st day of April, 1998] any lump sum consideration foracquiring 27 any know-how for use for the purposes of his business, one-sixth ofthe amount so paid shall be deducted in computing the profits and gains of thebusiness for that previous year, and the balance amount shall be deducted inequal instalments for each of the five immediately succeeding previous years.(2) Where the know-how referred to in sub-section (1) is developed in alaboratory, university or institution referred to in sub-section (2B) of section 32A,one-third of the said lump sum consideration paid in the previous year by theassessee shall be deducted in computing the profits and gains of the business forthat year, and the balance amount shall be deducted in equal instalments foreach of the two immediately succeeding previous years.28[(3) Where there is a transfer of an undertaking under a scheme of amalgamationor demerger and the amalgamating or the demerged company is entitled to a23. Inserted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967.24. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.25. Inserted by the Finance Act, 1985, w.e.f. 1-4-1986.26. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.27. For the meaning of term ‘acquiring’, see Taxmann’s Direct Taxes Manual, Vol. 3.28. Inserted by the Finance Act, 1999, w.e.f. 1-4-2000.