Section 24 - Amendment of Section 84 - Finance (No. 2) Act, 1967

24. Amendment of Section 84 In section 84 of the Income-tax Act, - (a) for sub-section (1), the following sub-section shall be, and shall be deemed always to have been, substituted, namely :- (1) Save as otherwise hereinafter provided, income-tax shall not be payable by an assessee on so much of the profits and gains derived from any industrial undertaking or business of a hotel or from any ship, to which this section applies, as does not exceed six per cent. per annum on the capital employed in such undertaking or business or ship, computed in the prescribed manner. ; (b) in sub-section (2), - (i) for clause (iii), the following clause shall be, and shall be deemed always to have been, substituted, namely :- (iii) it manufactures or produces articles or operates one or more cold storage plants, in any part of India, and has begun or begins to manufacture or produce articles or to operate such plant or plants, at any time within the period of twenty-three years next following the 1st day of April, 1948, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking; ; (ii) in clause (iv), before the words it employs ten or more workers , the words in a case where the industrial undertaking manufactures or produces articles, shall be, and shall be deemed always to have been, inserted; (iii) the following proviso shall be inserted at the end, namely :- Provided that the condition in clause (i) shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section : ; (iv) the following further proviso shall be inserted at the end, namely :- Provided further that the condition in clause (ii) shall be deemed not to have been contravened if the industrial undertaking is set up in rented premises. ; (c) for sub-section (3) and the Explanation occurring at the end, the following sub-section and Explanation shall, respectively, be substituted, namely :- (3) This section applies to the business of any hotel where all the following conditions are fulfilled, namely :- (a) the business of the hotel starts functioning on or after the 1st day of April, 1961, and is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer, to a new business, of a building previously used as a hotel, or of any machinery or plant previously used for any purpose; (b) the business of the hotel is owned and carried on by a company registered in India with a paid-up capital of not less than five hundred thousand rupees; (c) the hotel has such number and types of guest rooms and provides such amenities as may be prescribed, having regard to the population and the tourist importance of the place in which the hotel is located; and (d) the hotel is, for the time being, approved for the purposes of this sub-section, by the Central Government. Explanation : Where - (a) in the case of an industrial undertaking, any building, machinery or plant, or any part thereof, previously used for any purpose, or (b) in the case of the business of a hotel, any building, or any part thereof, previously used as a hotel, or any machinery or plant, or any part thereof, previously used for any purpose, is, in either case, transferred to a new business, and the total value of the building, machinery or plant or part so transferred does not exceed twenty per cent. of the total value of the building, machinery or plant used in the business, then, for the purposes of clause (ii) of sub-section (2) and clause (a) of sub-section (3), the condition specified therein shall be deemed to have been complied with and the total value of the building, machinery or plant or part so transferred shall not be taken into account in computing the capital employed in the industrial undertaking or the business of the hotel. ; (d) after sub-section (3), the following sub-section shall be, and shall be deemed always to have been, inserted, namely :- (3A) This section applies to any ship where all the following conditions are fulfilled, namely :- (i) it is owned by an Indian company and is wholly used for the purposes of the business carried on by it; (ii) it was not, previous to the date of its acquisition by the Indian company, owned and used in Indian territorial waters by a person resident in India; and (iii) it is brought into use by the Indian company at any time within a period of twenty-three years next following the 1st day of April, 1948. ; (e) in sub-section (5) and sub-section (6), for the words profits or gains of an industrial undertaking or hotel , the words profits and gains derived from an industrial undertaking or business of a hotel or from a ship shall be, and shall be deemed always to have been, substituted; (f) in sub-section (7), in clause (i), after the words manufacture or produce articles , the words or, as the case may be, operate the cold storage plant or plants shall be, and shall be deemed always to have been, inserted; (g) in sub-section (8), for the words a hotel and the hotel , the words the business of a hotel and the business of the hotel shall be, and shall be deemed always to have been, respectively, substituted; (h) after sub-section (8), the following sub-section shall be, and shall be deemed always to have been, inserted, namely :- (9) The provisions of this section shall, in relation to a ship, apply to the assessment for the assessment year relevant to the previous year in which the ship is brought into use by the Indian company and for the four assessment years immediately succeeding. .