Finance Act, 1979
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Amendment of section 20 (basis of assessment) of Finance Act, 1974. |
15.—As respects assessments for the year 1979-80 and any subsequent year of assessment, section 20 (inserted by the Finance Act, 1978 ) of the Finance Act, 1974 , is hereby amended by the addition of the following subsections: | |
“(4) Notwithstanding the provisions of subsection (3), where, by virtue of the said subsection (3), an assessment in respect of profits or gains from farming is made in accordance with the provisions of section 21 on an individual for any year of assessment, he shall be entitled, on giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, to elect to be charged to tax for that year in respect of those profits or gains on an amount determined in accordance with the provisions of section 58 of the Income Tax Act, 1967 , and all the provisions of the Income Tax Acts (including, in particular, the provisions relating to appeals against assessments and payments on account) shall apply in relation to the said assessment as if the notice given to the inspector were a notice of appeal against the assessment under section 416 of the Income Tax Act, 1967 , and the said assessment shall be amended as necessary so as to give effect to the election so made by the individual. | ||
(5) Where, as respects a year of assessment (referred to in this subsection as ‘the first year of assessment’), an individual elects in accordance with subsection (4)— | ||
(a) notwithstanding any of the other provisions of this section, he shall be charged to tax in respect of profits or gains from farming for each of the next two years of assessment following the first year of assessment in accordance with the provisions of section 58 of the Income Tax Act, 1967 , and | ||
(b) the year of assessment immediately preceding the first year of assessment or, where the said year of assessment immediately preceding the first year of assessment is not a year as respects which the individual has elected as provided for in subsection (1), each of the two-years of assessment immediately preceding the first year of assessment shall, in relation to that individual, be a year of assessment to which subsection (6) applies : | ||
Provided that paragraph (a) shall not apply for any year of assessment in which the individual is not, by virtue of section 15 (3), chargeable to tax on profits or gains from farming. | ||
(6) Where for any year of assessment, which is, in relation to an individual, a year of assessment to which this subsection applies, the amount of profits or gains from farming, on which the individual would have been chargeable for that year of assessment if he had been chargeable for that year in respect of those profits or gains in accordance with the provisions of section 58 of the Income Tax Act, 1967 , after deducting therefrom the aggregate of— | ||
(a) any capital allowances which would be allowed in charging those profits or gains to tax, and | ||
(b) any loss within the meaning of Chapter I of Part XIX of the Income Tax Act, 1967 , which would be, or would be regarded as being, deducted from or set off against those profits or gains, | ||
is in excess of the amount of those profits or gains on which he has been charged for that year of assessment in accordance with the provisions of section 21, there shall be made such assessment or assessments as is or are necessary to secure that the amount of tax ultimately borne by the individual for the year of assessment shall not be less than the amount which would have been borne by him if the said amount on which he has been charged in accordance with the provisions of section 21 had been increased by the amount of the excess. | ||
(7) Where, in the case of any individual, as respects any year of assessment, the amount of an excess is determined for the purposes of subsection (6)— | ||
(a) for the purposes of the formulae in subsections (5) and (6) of section 12 of the Finance Act, 1976 , any amount which would have been allowed as a deduction or treated as a trading receipt by virtue of the said section 12 and which is taken into account in computing the amount of profits or gains from farming on which the individual would have been chargeable for that year in accordance with section 58 of the Income Tax Act, 1967 , shall, as appropriate, be deemed to be a deduction which the individual was entitled to make in computing profits or gains from farming for a preceding accounting period which ended on or after the 6th day of April, 1975, or be deemed to be an amount which was treated as a trading receipt of the trade of farming for a preceding accounting period, | ||
(b) in determining what capital allowances, balancing allowances or balancing charges fall to be made to or on the individual for any chargeable period in taxing a trade of farming, any capital allowances which, in determining the amount of the said excess, are deducted from the said amount of profits or gains shall be deemed to have been made to that individual, and | ||
(c) for the purposes of Chapter I of Part XIX of the Income Tax Act, 1967 , relief shall be deemed to have been given for any loss which, in determining the amount of the said excess, is deducted from the said amount of profits or gains and no further relief shall be given for that loss under any of the provisions of the said Chapter. | ||
(8) An individual who has elected in accordance with subsection (4) shall, for each year of assessment which, by virtue of the election, is a year of assessment to which subsection (6) applies, prepare and deliver to the inspector, within three months after the date of the election, a statement in writing, signed by him, containing the amount of the profits or gains from farming on which he would be chargeable to tax for that year of assessment in accordance with the provisions of section 58 of the Income Tax Act, 1967 , and all the provisions of the Income Tax Acts relating to penalties for failure to make a statement or for fraudulently or negligently making an incorrect statement shall apply as if the statement were a statement required to be delivered to the inspector by reason of a notice given by him under section 169 of the said Income Tax Act, 1967 . | ||
(9) If, for any year of assessment— | ||
(a) an individual makes default in the delivery of a statement which he is required to deliver by virtue of subsection (8), or | ||
(b) the inspector is not satisfied with any such statement which has been delivered, or has received information as to its insufficiency, | ||
the inspector shall make an assessment on the individual concerned in such sum as, according to the best of the inspector's judgment, ought to be charged on that individual for that year of assessment by virtue of subsection (6).”. |