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11 1979

FINANCE ACT, 1979

Chapter III

Provisions Relating to Losses

Amendment of section 307 (right to repayment of tax by reference to losses) of Income Tax Act, 1967.

17. Section 307 of the Income Tax Act, 1967 , is hereby amended—

(a) by the deletion from subsection (1) of “or in the occupation of woodlands managed on a commercial basis and with a view to the realisation of profits,”, and

(b) by the insertion after subsection (1A) of the following subsections:

“(1AA) Where in any year of assessment any person carries on any trade other than farming, or any profession or employment, either solely or in partnership, or farming in a case in which this section applies, in the carrying on of which he has sustained a loss in the year preceding the year of assessment, he may make a claim under subsection (1) for the year of assessment in respect of the said loss in so far as relief has not already been given for that loss under the said subsection (1) or under any other provision of this Act; and any repayment of tax by virtue of this subsection shall be made in priority to any repayment of tax under the said subsection (1) in respect of a loss sustained in the year for which the repayment is claimed.

(1AAA) The provisions of this section shall not apply to any loss sustained in the year of assessment 1979-80 or any subsequent year of assessment by the owner of a stallion from the sale of services of mares by the stallion or of rights to such services or by the part-owner of a stallion from the sale of such services or such rights.”.

Amendment of section 308 (persons carrying on two or more trades) of Income Tax Act, 1967.

18. Section 308 of the Income Tax Act, 1967 , is hereby amended by the insertion of the following proviso :

“Provided that no deduction or set off shall be allowed in respect of a loss sustained in the year 1979-80 or in any subsequent year of assessment.”.

Amendment of section 318 (option to treat capital allowances as creating or augmenting a loss) of Income Tax Act, 1967.

19. Section 318 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsection (1) of the following subsection :

“(1) Subject to the provisions of this Chapter, any claim made under section 307 for relief in respect of a loss sustained in any trade in any year of assessment (hereafter referred to as ‘the year of loss’) may require the amount of the loss to be determined as if an amount equal to the capital allowances for the year of assessment for which the year of loss is the basis year were to be deducted in computing the profits or gains or losses of the trade in the year of loss and a claim may be so made notwithstanding that, apart from those allowances, a loss had not been sustained in the trade in the year of loss.”.

Amendment of section 319 (extent to which capital allowances to be taken into account) of Income Tax Act, 1967.

20. Section 319 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsection (1) of the following subsection:

“(1) The capital allowances for any year of assessment shall be taken into account under section 318 (1) only if and so far as they are not required to offset balancing charges for the year; and, where the capital allowances tàken into account are allowances for the year of claim or for the preceding year (the year of loss being the basis year for that year itself, or the claim being made by virtue of section 307 (1AA)), relief shall not be given by reference to those allowances in respect of an amount greater than the amount non-effective in the year for which the claim is, made or, in the case of allowances for the preceding year, the amount non-effective in both years.”.