(1) An assessee, at his option, shall be allowed a deduction of the whole of the capital expenditure incurred, wholly and exclusively, for the purposes of any specified business carried on by him during the tax year in which such expenditure is incurred. (2) Where the expenditure referred to in sub-section (1) is incurred prior to the commencement of its operations and such expenditure is capitalised in the books of account as on the date of commencement of its operations, it shall be allowed during the tax year in which such business is commenced. (3) This section shall apply to the specified business fulfilling all of the following conditions:— (a) it is not set up by splitting up, or the reconstruction, of an already existing business; (b) it is not set up by the transfer of machinery or plant previously used for any purpose to the specified business;
(c) if the business is of the nature referred to in sub-section (11)(d)(iii) and such business— (i) is owned by a company formed and registered in India under the Companies Act, 2013 or by a consortium of such companies or by an authority or a board or a corporation established or constituted under any Central Act or State Act; (ii) has been approved by the Petroleum and Natural Gas Regulatory Board established under section 3(1) of the Petroleum and Natural Gas Regulatory Board Act, 2006 and notified by the Central Government in this behalf; (iii) has made not less than such proportion of its total pipeline capacity as specified by regulations made by the Petroleum and Natural Gas Regulatory Board established under section 3(1) of the Petroleum and Natural Gas Regulatory Board Act, 2006 available for use on common carrier basis by any person other than the assessee or an associated person; and (iv) fulfils any other condition as may be prescribed; (d) if the business is of the nature referred to in sub-section (11)(d)(xiv), such business,— (i) is owned by a company registered in India or by a consortium of such companies or by an authority or a board or corporation or any other body established or constituted under any Central Act or State Act; (ii) entity referred to in sub-clause (i) has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for developing or operating and maintaining or developing, operating and maintaining a new infrastructure facility. (4) No deduction shall be allowed under the provisions of Chapter VIII-C in relation to such specified business for the same or any other tax year, if a deduction under sub-section (1) is claimed and allowed. (5) No deduction in respect of the expenditure referred to in sub-section (1) shall be allowed to the assessee under any other section in any tax year or under this section in any other tax year, if the deduction has been claimed and allowed to him under this section. (6) The provisions of this section shall apply to the specified business referred to in column B of the Table below if it commences its operations as specified in column C thereof. Direct Taxes Committee 9 6 CH. IV D.- PROFITS AND GAINS OF BUSINESS OR PROFESSION [Sec 26-66] Table Sl. No. Nature of specified business Date of commencement of operations being on or after A B C 1. Laying and operating a cross- 1st April, 2007. country natural gas pipeline network for distribution, including storage facilities being an integral part of such network. 2. Building and operating a new hotel 1st April, 2010. of two star or above category as classified by the Central Government. 3. Building and operating a new 1st April, 2010. hospital with at least 100 beds for patients. 4. Developing and building a housing 1st April, 2010. project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, and which is notified by the Board in this behalf in accordance with the guidelines as may be prescribed. 5. Developing and building a housing 1st April, 2011. project under a scheme for affordable housing framed by the Central Government or a State Government, and which is notified by the Board in this behalf in accordance with the guidelines as may be prescribed. 6. A new plant or a newly installed 1st April, 2011. capacity in an existing plant for production of fertilizer. 7. Setting up and operating an inland 1st April, 2012. container depot or a container freight station notified or approved under the Customs Act, 1962 (52 of 1962). 8. Bee-keeping and production of 1st April, 2012. honey and beeswax. Direct Taxes Committee 9 7
A B C 9. Setting up and operating a 1st April, 2012. warehousing facility for storage of sugar. 10. Laying and operating a slurry 1st April, 2014. pipeline for the transportation of iron ore. 11. Setting up and operating a semi- 1st April, 2014. conductor wafer fabrication manufacturing unit, and which is notified by the Board in this behalf in accordance with the guidelines as may be prescribed.