Finance Act, 1974
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Wear and tear allowance deemed to have been made in certain cases. |
25.—(1) In determining whether any, and if so what, wear and tear allowance, balancing allowance or balancing charge in respect of machinery or plant falls to be made to or on any person for any year of assessment in charging the profits or gains from farming, there shall be deemed to have been made to that person, for every previous year of assessment in which the machinery or plant belonged to him and which is a year of assessment to be taken into account for the purpose of this section, such wear and tear allowance or greater wear and tear allowance, if any, in respect of the machinery or plant as would have fallen to be made to him if, in relation to every such previous year— | |
(a) the profits or gains from farming had been chargeable to tax under Case I of Schedule D, | ||
(b) farming had been carried on by him ever since the date on which he acquired the machinery or plant, | ||
(c) the machinery or plant had been used by him solely for the purposes of farming ever since that date, and | ||
(d) a proper claim had been duly made by him for wear and tear allowance in respect of the machinery or plant for every relevant year of assessment. | ||
(2) There shall be taken into account for the purposes of this section every previous year of assessment in which the machinery or plant concerned belonged to the person and— | ||
(a) during which the machinery or plant was not used by the person for the purposes of farming, | ||
(b) during which farming was not carried on by him, or | ||
(c) during which farming was carried on by him in such circumstances that the full amount of the profits or gains thereof was not liable to be charged to tax under Case I of Schedule D. | ||
(3) Nothing in this section shall affect the provisions of section 272 (4) of the Income Tax Act, 1967 . | ||
(4) In this section— | ||
“balancing allowance” and “balancing charge” have the same meanings as in Chapter II of Part XVI of the Income Tax Act, 1967 ; | ||
“wear and tear allowance” means a deduction allowed under section 241 of the Income Tax Act, 1967 . |