54GA. Exemption of
capital gains on transfer of assets in cases of shifting of
industrial undertaking from urban area to any Special Economic
Zone.- (1) Notwithstanding anything contained in
section 54G, where the capital gain arises from the transfer
of a capital asset, being machinery or plant or building or
land or any rights in building or land used for the purposes
of the business of an industrial undertaking situate in an
urban area, effected in the course of, or in consequence of
the shifting of such industrial undertaking to any Special
Economic Zone, whether developed in any urban area or any
other area and the assessee has within a period of one year
before or three years after the date on which the transfer
took place,—
(a) purchased machinery or plant for the purposes of business
of the industrial undertaking in the Special Economic Zone
to which the said undertaking is shifted;
(b) acquired building or land or constructed building for
the purposes of his business in the Special Economic Zone;
(c) shifted the original asset and transferred the establishment
of such undertaking to the Special Economic Zone; and
(d) incurred expenses on such other purposes as may be specified
in a scheme framed by the Central Government for the purposes
of this section,
then, instead of the capital gain being charged to income-tax
as income of the previous year in which the transfer took
place, it shall, subject to the provisions of sub-section
(2), be dealt with in accordance with the following provisions
of this section, that is to say,—
(i) if the amount of the capital gain is greater than the
cost and expenses incurred in relation to all or any of the
purposes mentioned in clauses (a) to (d) (such cost and expenses
being hereafter in this section referred to as the new asset),
the difference between the amount of the capital gain and
the cost of the new asset shall be charged under section 45
as the income of the previous year; and for the purpose of
computing in respect of the new asset any capital gain arising
from its transfer within a period of three years of its being
purchased, acquired, constructed or transferred, as the case
may be, the cost shall be Nil; or
(ii) if the amount of the capital gain is equal to, or less
than, the cost of the new asset, the capital gain shall not
be charged under section 45, and for the purpose of computing
in respect of the new asset any capital gain arising from
its transfer within a period of three years of its being purchased,
acquired, constructed or transferred, as the case may be,
the cost shall be reduced by the amount of the capital gain.
Explanation.—In this sub-section,—
(a) “Special Economic Zone” shall have the meaning
assigned to it in clause (za) of section 2 of the Special
Economic Zones Act, 2005 ;
(b) “urban area” means any such area within
the limits of a muni- cipal corporation or municipality as
the Central Government may, having regard to the population,
concentration of industries, need for proper planning of the
area and other relevant factors, by general or special order,
declare to be an urban area for the purposes of this sub-section.
(2) The amount of capital gain which is not appropriated
by the assessee towards the cost and expenses incurred in
relation to all or any of the purposes mentioned in clauses
(a) to (d) of sub-section (1) within one year before the date
on which the transfer of the original asset took place, or
which is not utilised by him for all or any of the purposes
aforesaid before the date of furnishing the return of income
under section 139, shall be deposited by him before furnishing
such return such deposit being made in any case not later
than the due date applicable in the case of the assessee for
furnishing the return of income under sub-section (1) of section
139 in an account in any such bank or institution as may be
specified in, and utilised in accordance with, any scheme
which the Central Government may, by notification, frame in
this behalf and such return shall be accompanied by proof
of such deposit; and, for the purposes of sub-section (1),
the amount, if any, already utilised by the assessee for all
or any of the aforesaid purposes together with the amount
so deposited shall be deemed to be the cost of the new asset
:
Provided that if the amount deposited under this sub-section
is not utilised wholly or partly for all or any of the purposes
mentioned in clauses (a) to (d) of sub-section (1) within
the period specified in that sub-section, then,—
(i) the amount not so utilised shall be charged under section
45 as the income of the previous year in which the period
of three years from the date of the transfer of the original
asset expires; and
(ii) the assessee shall be entitled to withdraw such amount
in accordance with the scheme aforesaid.
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