Section 18 - Amendment of section 43 - Finance (No. 2) Act, 1998

18. Amendment of section 43 In section 43 of the Income-tax Act, in clause (1),- (a) after Explanation 8, the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1994, namely:- Explanation 9.- For the removal of doubts, it is hereby declared that where an asset is or has been acquired on or after the 1st day of March, 1994 by an assessee, the actual cost of asset shall be reduced by the amount of duty of excise or the additional duty leviable under section 3 of the Customs Tariff Act, 1975 in respect of which a claim of credit has been made and allowed under the Central Excise Rules, 1944. (b) after Explanation 9, the following Explanation shall be inserted with effect from the 1st day of April, 1999, namely:- Explanation 10.- Where a portion of the cost of an asset acquired by the assessee has been met directly or indirectly by the Central Government or a State Government or any authority established under any law or by any other person, in the form of a subsidy or grant or reimbursement (by whatever name called), then, so much of the cost as is relatable to such subsidy or grant or reimbursement shall not be included in the actual cost of the asset to the assessee. Provided that where such subsidy or grant or reimbursement is of such nature that it cannot be directly relatable to the asset acquired, so much of the amount which bears to the total subsidy or reimbursement or grant the same proportion as such asset bears to all the assets in respect of or with reference to which the subsidy or grant reimbursement is so received, shall not be included in the actual cost of the asset to the assessee.