33A. Development allowance.- (1) In respect of planting
of tea bushes on any land in India owned by an assessee who
carries on business of growing and manufacturing tea in India,
a sum by way of development allowance equivalent to—
(i) where tea bushes have been planted on any land not planted
at any time with tea bushes or on any land which had been
previously abandoned, fifty per cent of the actual cost of
planting; and
(ii) where tea bushes are planted in replacement of tea
bushes that have died or have become permanently useless on
any land already planted, thirty per cent of the actual cost
of planting,
shall, subject to the provisions of this section, be allowed
as a deduction in the manner specified hereunder, namely :—
(a) the amount of the development allowance shall, in the
first instance, be computed with reference to that portion
of the actual cost of planting which is incurred during the
previous year in which the land is prepared for planting or
replanting, as the case may be, and in the previous year next
following, and the amount so computed shall be allowed as
a deduction in respect of such previous year next following;
and
(b) thereafter, the development allowance shall again be
computed with reference to the actual cost of planting, and
if the sum so computed exceeds the amount allowed as a deduction
under clause (a), the amount of the excess shall be allowed
as a deduction in respect of the third succeeding previous
year next following the previous year in which the land has
been prepared for planting or replanting, as the case may
be :
Provided that no deduction under clause (i) shall be allowed
unless the planting has commenced after the 31st day of March,
1965, and been completed before the 1st day of April, 1990
:
Provided further that no deduction shall be allowed under
clause (ii) unless the planting has commenced after the 31st
day of March, 1965, and been completed before the 1st day
of April, 1970.
(2) Where the total income of the assessee assessable for
the assessment year relevant to the previous year in respect
of which the deduction is required to be allowed under sub-section
(1) (the total income for this purpose being computed after
deduction of the allowance under sub-section (1) or sub-section
(1A) or clause (ii) of sub-section (2) of section 33, but
without making any deduction under sub-section (1) of this
section or any deduction under Chapter VI-A ) is nil or is
less than the full amount of the development allowance calculated
at the rates and in the manner specified in sub-section (1)—
(i) the sum to be allowed by way of development allowance
for that assessment year under sub-section (1) shall be only
such amount as is sufficient to reduce the said total income
to nil ; and
(ii) the amount of the development allowance, to the extent
to which it has not been allowed as aforesaid, shall be carried
forward to the following assessment year, and the development
allowance to be allowed for the following assessment year
shall be such amount as is sufficient to reduce the total
income of the assessee assessable for that assessment year,
computed in the manner aforesaid, to nil, and the balance
of the development allowance, if any, still outstanding shall
be carried forward to the following assessment year and so
on, so, however, that no portion of the development allowance
shall be carried forward for more than eight assessment years
immediately succeeding the assessment year in which the deduction
was first allowable.
Explanation.—Where for any assessment year development
allowance is to be allowed in accordance with the provisions
of sub-section (2) in respect of more than one previous year,
and the total income of the assessee assessable for that assessment
year (the total income for this purpose being computed after
deduction of the allowance under sub-section (1) or sub-section
(1A) or clause (ii) of sub-section (2) of section 33, but
without making any deduction under sub-section (1) of this
section or any deduction under Chapter VI-A ) is less than
the amount of the development allowance due to be made in
respect of that assessment year, the following procedure shall
be followed, namely :—
(i) the allowance under clause (ii) of sub-section (2) of
this section shall be made before any allowance under clause
(i) of that sub-section is made; and
(ii) where an allowance has to be made under clause (ii)
of sub-section (2) of this section in respect of amounts carried
forward from more than one assessment year, the amount carried
forward from an earlier assessment year shall be allowed before
any amount carried forward from a later assessment year.
(3) The deduction under sub-section (1) shall be allowed
only if the following conditions are fulfilled, namely :—
(i) the particulars prescribed in this behalf have been
furnished by the assessee;
(ii) an amount equal to seventy-five per cent of the development
allowance to be actually allowed is debited to the profit
and loss account of the relevant previous year and credited
to a reserve account to be utilised by the assessee during
a period of eight years next following for the purposes of
the business of the undertaking, other than—
(a) for distribution by way of dividends or profits; or
(b) for remittance outside India as profits or for the creation
of any asset outside India; and
(iii) such other conditions as may be prescribed.
(4) If any such land is sold or otherwise transferred by
the assessee to any person at any time before the expiry of
eight years from the end of the previous year in which the
deduction under sub-section (1) was allowed, any allowance
under this section shall be deemed to have been wrongly made
for the purposes of this Act, and the provisions of sub-section
(5A) of section 155 shall apply accordingly :
Provided that this sub-section shall not apply—
(i) where the land is sold or otherwise transferred by the
assessee to the Government, a local authority, a corporation
established by a Central, State or Provincial Act, or a Government
company as defined in section 617 of the Companies Act, 1956
(1 of 1956); or
(ii) where the sale or transfer of the land is made in connection
with the amalgamation or succession referred to in sub-section
(5) or sub-section (6).
(5) Where, in a scheme of amalgamation, the amalgamating
company sells or otherwise transfers to the amalgamated company
any land in respect of which development allowance has been
allowed to the amalgamating company under sub-section (1),—
(a) the amalgamated company shall continue to fulfil the
conditions mentioned in sub-section (3) in respect of the
reserve created by the amalgamating company and in respect
of the period within which such land shall not be sold or
otherwise transferred and in default of any of these conditions,
the provisions of sub-section (5A) of section 155 shall apply
to the amalgamated company as they would have applied to the
amalgamating company had it committed the default; and
(b) the balance of development allowance, if any, still
outstanding to the amalgamating company in respect of such
land shall be allowed to the amalgamated company in accordance
with the provisions of sub-section (2), so, however, that
the total period for which the balance of development allowance
shall be carried forward in the assessments of the amalgamating
company and the amalgamated company shall not exceed the period
of eight years specified in sub-section (2) and the amalgamated
company shall be treated as the assessee in respect of such
land for the purposes of this section.
(6) Where a firm is succeeded to by a company in the business
carried on by it as a result of which the firm sells or otherwise
transfers to the company any land on which development allowance
has been allowed, the provisions of clauses (a) and (b) of
sub-section (5) shall, so far as may be, apply to the firm
and the company.
Explanation.—The provisions of this sub-section shall
apply if the conditions laid down in the Explanation to sub-section
(4) of section 33 are fulfilled.
(7) For the purposes of this section, “actual cost
of planting” means the aggre- gate of—
(i) the cost of preparing the land;
(ii) the cost of seeds, cutting and nurseries;
(iii) the cost of planting and replanting; and
(iv) the cost of upkeep thereof for the previous year in
which the land has been prepared and the three successive
previous years next following such previous year,
reduced by that portion of the cost, if any, as has been met
directly or indirectly by any other person or authority:
Provided that where such cost exceeds—
(i) forty thousand rupees per hectare in respect of land
situate in a hilly area comprised in the district of Darjeeling;
or
(ii) thirty-five thousand rupees per hectare in respect
of land situate in a hilly area comprised in an area other
than the district of Darjeeling; or
(iii) thirty thousand rupees per hectare in any other area,
then, the excess shall be ignored.
Explanation.—For the purposes of this proviso, “district
of Darjeeling” means the district of Darjeeling as on
the 28th day of February, 1981, being the date of introduction
of the Finance Bill, 1981, in the House of the People.
(8) The Board may, having regard to the elevation and topography,
by general or special order, declare any areas to be hilly
areas for the purposes of this section and such order shall
not be questioned before any court of law or any other authority.
Explanation.—For the purposes of this section, an assessee
having a leasehold or other right of occupancy in any land
shall be deemed to own such land and where the assessee transfers
such right, he shall be deemed to have sold or otherwise transferred
such land.
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