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Report No. 12

108. Dividends from certain companies.-

(1) Dividends received by a company from an Indian company formed and registered after the 31st day of March, 1952, shall not be included in its total income for the, purposes of super-tax, where-

[Section 56A(1)(i), opening lines]

(i) the Central Government is satisfied that the Indian company is wholly or mainly engaged in an industry for the manufacture or production of any one or more of the items specified in sub-section (3), and

[Section 56A(1)(i), part]

(ii) the Indian company fulfils the following conditions, namely:-

(a) it is not formed by the splitting up or reconstruction of business already in existence;

(b) it is not formed by the transfer to it of building, machinery or plant used in a business to which was at any time being carried on; and,

(c) it employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.

[Section 56A(1)(ii)]

(2) The exclusion specified in sub-section (1) shall apply also to dividends payable to a company in respect of any fresh capital raised by an Indian company after the 28th day of February, 1953, by public subscription for the purpose of increasing the production of, or starting a separate unit of, any one or more of the items specified in sub-section (3).

[Section 56A(2)]

(3) The items referred to in sub-sections (1) and (2) are the following, namely:-

1. Coal, including coke and other derivatives;

2. Iron and steel;

3. Motor and aviation fuel, kerosene, crude oils and synthetic oils (not being oil exploration);

4. Heavy chemicals including fertilizers;

5. Heavy machinery used in industry including ball and roller bearing and gear wheels and parts thereof, boilers and steam generating equipment;

6. Machinery and equipment for the generation, transmission and distribution of electric energy;

7. Non-ferrous .metals including alloys;

8. Paper including newsprint and paper board;

9. Internal combustion, engines;

10. Power-driven pumps;

11. Automobiles;

12. Tractors;

13. Cement;

14. Electric Motors;

15. Locomotives;

16. Rolling Stock;

17. Machine Tools;

18. Agricultural Implements;

19. Ferro-manganese;

20. Dye-stuffs;

as specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951).

[Section 56A(1)(i), part]



Income-Tax Act, 1922 Back




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