34A. Restriction on unabsorbed depreciation and unabsorbed
investment allowance for limited period in case of certain
domestic companies.- (1) In computing the profits
and gains of the business of a domestic company in relation
to the previous year relevant to the assessment year commencing
on the 1st day of April, 1992, where effect is to be given
to the unabsorbed depreciation allowance or unabsorbed investment
allowance or both in relation to any previous year relevant
to the assessment year commencing on or before the 1st day
of April, 1991, the deduction shall be restricted to two-third
of such allowance or allowances and the balance,—
(a) where it relates to depreciation allowance, be added
to the depreciation allowance for the previous year relevant
to the assessment year commencing on the 1st day of April,
1993 and be deemed to be part of that allowance or if there
is no such allowance for that previous year, be deemed to
be the allowance for that previous year and so on for the
succeeding previous years ;
(b) where it relates to investment allowance, be carried
forward to the assessment year commencing on the 1st day of
April, 1993 and the balance of the investment allowance, if
any, still outstanding shall be carried forward to the following
assessment year and where the period of eight years has expired
before the portion of such balance is adjusted, the said period
shall be extended beyond eight years till such time the portion
of the said balance is absorbed in the profits and gains of
the business of the domestic company.
(2) For the assessment year commencing on the 1st day of
April, 1992, the provisions of sub-section (2) of section
32 and sub-section (3) of section 32A shall apply to the extent
such provisions are not inconsistent with the provisions of
sub-section (1) of this section.
(3) Nothing contained in sub-section (1) shall apply where
the amount of unabsorbed depreciation allowance or of the
unabsorbed investment allowance, as the case may be, or the
aggregate amount of such allowances in the case of a domestic
company is less than one lakh rupees.
(4) Nothing contained in sections 234B and 234C shall apply
to any shortfall in the payment of any tax due on the assessed
tax or, as the case may be, returned income where such shortfall
is on account of restricting the amount of depreciation allowance
or investment allowance under this section and the assessee
has paid the amount of shortfall before furnishing the return
of income under sub-section (1) of section 139.
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