 the direct tax laws (amendment) bill, 1988 arrangement of clausesclatjsss chapter i preiiiminary1 short title and commencement chapter n aasbndmeins to the ikcomb-aax act, 19612 amendment of section 23 araaidm«»t of section 34 amendment of section 105 amendmwit of section 116 amendment of section 32a7 amendment of section 32ab8 amendment of section 3&9 amendment of section 4010 amendment of section 44ac11 amendment of section 6412 insertion of new section 67a, 13 amendment of section 80c14 amendment of section 80cc15 amendment of section 80hhc16- insertion of new section 80hhd17 amendment of section 8618 amendment of section 115a19 amendment of section 115j20 amendment of section 139 21 amendment of section 143 22 ammidment of section 144a23- amendment of section 14724 amendment of section 14825 amendment of section 155 clauses26 substitution of new sub-heading for sufa^jieading dd ot chapter xv27 omission of section 167a28 insertion of new section 167b,29 amendment of section 19030 amendment of section 194a31 omission of section 194e, 32 &abstitution of new section for section 196a33 amendmmit of sections l98, 199, 200, 202, 203, 208a, 206 and 21534 amendment of section 206c 35 amendment of section 209 36 amendment of sections 222, 223 224, 225, 226, 228 and 228a37 amendment of section 226 38- amendment of section 2ha-39 amendment of section 234b!40 amendmmt of section 234c41 amendment of secticm 244a42 amendmoit of sub-heading to chapter xx43 amendment of section 246 44 omission of section 246a45 amendment of section 24946 amendmrat of section 25347 amendment of section 25548 amendment of section 269a49 a m eninent of section 269b50 amendment of section 27151 amendment of section 273a52 amendment of section 275 53 insertion of new section 279b 54 amendment of second schedule55 amendment of itiird schedule56 amendment of tenth schedule57 consequential amendments chapter iii a m en d m en ts to the w ealth-tax a ct, 195758 amendment of section 259 a m en d m en t of section 460 amendment of section 5 61 a m en d m en t o f section 662 s u b stitu tio n  of n ew  section for section 7 clauses ;63 amendment of section 1164 amendment of section 1665 amendment of section 16a66 amendm«it of section 17-67 amendment of section 17b68 amendment of section 18 69 substitution of new section for section isa70 amendment of section 18b71 amendment of section 23-72 amendment of section 2673 amendment of section 34a74 amendment of section 3575 insertion of new section 3676 amendment of section 4177 amendment of section 42a78 insertion of new schedule iii chapter iv amendmems to the glpt-tax act, 19s879 amendment of section 3 80 amendment of section 5 '81 substitution of new section for section 682 amendment of section 10 83 amendment of section 1584 a m endm ent of section 1666 amendment of section 16b86 amendment of section 1787 substitution of new section for section 17a88 amendment of section 2289 amendment of section 25 90 amendment of section 33a91 amendment of section 3492 insertion of new section 35e93 amendment of section 4594 insertion of new schedule ii chapter va m endm ents to the d ihect t ax l aw s (a m endm ent) a ct, 198795 amendment of act 4 of 1968 bih no 127 of 1988 the direct tax laws (amendment) bill, 1988 a billfurther to amend the income-tax act^ 1961 the wealth-tax act, 1967, the gift-tax act, 1958 and the direct tax laws (amendment) act, 1987 be it enacted by parliament in the thirty-ninth year of the republic of india as follows; — chapter i p r e l im in a r y5 1 (i) this act may be called the direct tax laws (amendment)act, 1988sjiorttitleand com-injncc-ment   (2) save aa otherwise provided in this act, sections 2 to 31 and 33 to95 shall come into force on the 1st day of april, 1989 chapter ii10 a m e n d m e n t s  to t h e i n c o m e - tax act, 1961|of ]9fi12 in section 2 of the income-tax act, 1961 (hertafter in this chapter referred to as the income-tax act),—amend­ment of section 2(o) in clause (24),—(i) in sub-clause (iia) [as amended by section 3 of the 1988 15 direct tax laws (ameivlment) act, 1987], for the words, brac­kets letters and figures "or by a trust or institution of nati<kialimportance referred to in clause (d) of sub-section (i)' d  sec­tion 80f", the words, brackets, figures and letter "or by an asso­ciation or institution r e te ic d  to in dause (21) or clause (25), oif by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (u) of clause (25c), of section 10" shall be substituted; ^(ii) after sub-clause (hi), the following sub-clauses shall be inserted and shall be- deemed to have been inserted with effect from the 1st day of april, 1962, namely:—"(iiia) any special allowance or benefit, other ftmn per- quisite included imder aub-clause (tii), sgpecifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the performance of ths duties of an office or employment of profit;(iiib) any allowance granted to the assessee either to meet his personal exp«ises at the place where the duties of 15 his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to com­pensate him for the increased cost of living;'';(b) in clause (25) [as substituted by clause (k of section 3 of the direct tax laws (amendment) act, 1987], the words, brackets 20 4 of 1988 and figure "sub-section (2) of shall be omitted and shall be deemed to have been omitted with effect from the 1 st day of april, 1988;(c) in clause (s7a) [as amended by clause ( 0 ) of section 3 of the direct tax laws (amendment) act, 1987],—4 of 198825(a) in sub-clause (i), the words, figures and letter "or section 167a", wherever they occur, shall be omitted;(b) in sub-clause (ii) the figures and letter ", 194e" shall be omitted and shall be deemed to have been omitted with effect from the 1st day of april, 1988amendsection 3 of the income-tax act [as substituted by section 4 of jq mentof the direct tax laws (amend; »nt) act, 1987], in sub-section (2), after 4 ofig 8 8 sections the proviso, the following provisos shall be inserted, namely: —'provided farther tliat in the case of a business or profession newly s^t up or a source of income newly coming into existence on or after the 1st day of april, 19&7 but before the 1st day of april, 3 5  1988 and v^here the accounts in relation to such business or profes­sion or source of income have not been made up to the 31s{ day of march, 1988, the "previous year" in relation to the assessment year commencing on the 1st day of april, 1989 shall be the period begin­ning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending on the 31st day of march, 1989:provided also that where the assessee has adopted one or more periods as the "previous year" in relation to the assessment year commencing on the 1st day of april, 1988, for any source or sources 4 5  of his income, in addition to the business or profession or source of income referred to in the second proviso, the previous ye^r in re­ lation to the assessment year commencing on the 1st day of april,1s89, shall be reckoned separately in the manner aforesaid in respect of each such sdoirce of income, and the longer or the longest of the periods so reckoned shall be the previous year in relation to the said assessment year'5 4 in section 10 of the income-tax act,— amend-(a) after clause (6b) the following clause shall be inserted, namely;— lo10" (6c) any income arising to such foreign company, as the central government may, by notification in the official gazette, specify in this behalf, by way of fees for technical services received in pursuance of an agreement entered into with that government for providing services in or outside india in pro­ jects connected with security of india;'';'6 of 1988 clause (15), after sub-clause (iic) [as inserted by section' 4 of the fina^ice act, 1988], the following sub-clause shall be inserted, namely:—'(iid) interest on such bonds, as the central government may, by notification in the official gazette, specify, arising to—(a) a non-resident indian, being an individual owning20 the bonds; or(b) any individual owning the bonds by virtue of being a nominee or survivor of the non-resident indian; or(c) any individual to whom , the bonds have been gifted by the non-resident indian:2 5  provided that the aforesaid bonds are purchased by a non­resident indian in foreign exchange and the interest and principal received in respect of such bonds, whether on their maturity or otherwise, is not allowable to be taken out of india:3 q provided furthcsr that where an individual, who is a non­resident indian in any previous year in which the bonds are acquired, becomes a resident in india in any subsequent year, the provisions of this sub-clause shall continue to apply in relation to such individual:35 provided also that in a case where the bonds are encashedin a previous year prior to their maturity by an individual who is so entitled, the provisions of this sub-clause shall not apply to such individual in relation to the assessment year relevant to such previous yearexplanation— ^for the purposes of this sub-clause, the expression "non-resident indian" shall have the meaning assigned to it in clause (c) of section 115c;';(c) for clause (21) [as it stood immediately before its omission by clause (k) of section 6 of the direct tax laws (amendment)act, 1987], the following clause shall be substituted, with effect 4ofi98| from the 1st day of april 1990, namely; —'{21) any income of a scientific research association for the time being approved for the purpose of clause (ii) of sub-section (1) of section 35: 5provided that the scientific research association—(a) applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is estab­lished, and the provisions of sub-section (2 ) and sub-section(3) of section 1 1 shall apply in relation to such accumulation |q subject to the following modifications, namely: —(i) in sub-section (2 ),—(7) the words, brackets, letters and figure"referred to in clause (a) or clause (b) of sub­section (i) read with the explanation to that sub- section" shall be omitted;(2 ) for the words "to charitable or religious purposes", the words "for the purposes of scientific, research'' shall be substituted;(3) the reference to ' assessing officer" in 2 0clause (a) thereof shall be construed as a reference to the "prescribed authority" referred to in clause(ii) of sub-section (7) of section 35;(ii) in sub-section (3), in clause (a), for the words "charitable or religious purposes", the words "the pur- 2 5  poses of scientific research" shall be substituted; and(b) does not invest or deposit its funds (other than voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the board may, by notification in the official gazette, specify) ^for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11: provided further that nothing contained in this clause shall apply in relation to any income of the scientific research associa tion, being profits and gains cf business;';(d) for clause (2s) [as it stood immediately before its omission by clause (k) of section 6  of the direct tax laws (amendment)act, 1987], the following clause shall be substituted with effect from 4 of 1988, the 1st day of api'il, 1990, namely:—" (23) any income of an association or institution established in india which may be notified by the central government in the official gazette having regard to the fact that the associa­tion or institution has as its object the control, supervision, regulation or encouragement in india of the games of cricket, hockey, football, tennis or such other games or sports as the 45central government may, by notification in the official ga2rett», specify in this behalf:provided that the association or institution shall mak« an application in the prescribed form and manner to the prescribed 5  authority for the purpose of grant of the exemption, or c«ntinuance thereof, under this clause;provided further that the central government may, before notifying the association or institution under this clause call for such documents (including audited annual accounts) or inforjq mation from the association or institution as it thinks necessary in order to satisfy itself about the genuineness of the activities of the association or institution and that government may alsomake such inquiries as it may deem necessary in this behalf:provided also thai the association or institution,—] 5  (a) applies its income or accumulates it for application,wholly and exclusively to the objects for v/hich it is estab-- lished and the provisions of sub-section (2) and sub-section(i) of section 11 shall apply in relation to such accumulatioft subject to the following modifications, namely:—20 (0 sub-section (2),—(i) the words, brackets, letters and figure "referred to in clause (a) or clause (b) of sub­section (j) read with the explanation to that srub- section' shall be omitted;2 5  (2) for the words "lo charitable or religiouapurposes"^ the words "for the purposes of gamee or sports" shall be substituted;(3) the reference to "assessing officer" in clause (a) thereof shall be construed as a referowwito the "prescribed authority" referred to in ^ efirst proviso to this clause;30(iii) in sub-section (3), in clause (a), for the watili "charitable or religious purposes"^ the words "the pur« poses of games or sports' shall be substituted; and2^ (b) does not invest or deposit its funds (other thanvoluntary contrib'utions received and maintained in the form of jewellery, furniture or any other article as the board may, by notification in the official gazette, specify) for any period during the previous year otherwise than in any on or more of the forms or modes specified in sub-section (5) of section 11; and(c) does not distribute any part of its income in m y manner to its members except as grants to any assodatio or institution affiliated to it:i p ro v id ed  also that the exemption under this clause shalln o t be denied in relation to any funds invested or depoaitedbefore the 1st day of april, 1989 otherwise than in any one or more of the forms or modes specified                                       subsection (5) of section 11 if        such funds do not                            conti^iue to remain so                                                    invested or deposited after the 30th day of march, 1990:   provided also                    that nothing                                   contained in this clause shall 5 apply in relation to any income of the association or institution, being profits and gains of business:   provided also that any notification issued by the                                                        central governm ent under this clause in relation to any association or institution shall, at any one time, have effect for such assessment 10 year or years, not exceeding three assessment years, (including an assessment year or years                               commencing                                            before the                                                        date on which such notification is                            issued) as may be specified in the notification:      (c)                  in clause (23c) [as it stood immediately before its amend- 15 m ent by section 6 of the direct tax laws (amendment) act, 1987],                                                                                                    ^for sub-clauses (it') and (v) the following sub-clauses shall be substi­tuted with effect from the 1st day of april^ 1990, namely: —      " (it') r y  other fund or institution established for chari­table purposes which may be notified by the central government 20 in the official gazette, having regard to the objects of the fund or institution and its importance throughout india or throughout any state or states; or     (v) any trust                          (including any                                              other legal                                                              obligation) or institution wholly for public                                      religious purposes or                                                                  wholly for 25 public religious and charitable purposes, which may be notified by the central government in the official gazette, having regard to the m anner in which the affairs of the trust or institution are administered and supervised for ensuring that the income accru­ing thereto is properly applied for the objects thereof:   provided that the fund or trust or institution referred to in sub-iclause (iv) or sub-clause (i;) shall make an application in the prescribed form and manner to the prescribed authority for the purpose of grant of the exemption, or continuance thereof, under sub-clause (iv) or sub-clause (v):                                                                   35   provided further that the central government may before notifying the fund or trust or institution under sub-clause (iv) or sub-clause (r), call for                           such documents                                            (including audited annual accounts) or information from the fund or trust or insti­tution as it thinks necessary in order to satisfy itself about the 40 genuineness of the activities of the fund or trust or institution and that government may also make such inquiries as it may deem necessary in this behalf:   provided also that the fund or trust or institution referred to in sub--clause (it;) or sub-clause (i))—                                                                  45    (a) applies its income, or accumulates it for application,wholly and exclusively to the objects for which it is estab­lished; and                              (b) does                                          not invest or                                                          deposit its funds (other than                          voluntary                                      contributions received and                                                                     maintained in                                                                                      the                          form of jewellery, furniture or any other article as the board                          may, by notification in the official gazette, specify) for any            5                          period during the previous year otherwise than in any one or)                           more of the forms or modes specified in sub-section (5)( o£                         section 11;provided also that the exemption under sub-clause {iv) or sub-clause (v) shall not be denied in relation to any funds in- 10 vested or deposited before the 1st day of april, 1989 otherwisethan in any one or more of the forms or modes specified in sub­section (5) of section 11 if such funds do not continue to remain so invested or deposited after the 30th day of march, 1990;provided also that nothing contained in sub-clause (iv) or ^ 15 sub-clause (v)'shall apply in relation to any income of the fundor trust or institution, being profits and gains of buaness, unless the business is incidental to the attainment of its objectives and separate books of accounts are maintained by it in respect of such business:2 0  provided also that any notification issued by the centralgovernment under sub-clause (iv) or sub-clause iv) shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years (including an assessment year - or years commencing before the date on which such notification 2 5  is issued) as may be specified in the notification;";{/) in clause (23d), the words including the condition that at least ninety per cent, of such income shall be distributed to the holders of its units every year" shall be omitted and shall be deemed to have been omitted with effect from the 1st day of april, 1988\  30 5 in section 11 of the income-tax act fas it stood immediately before ameadits omission by section 7 of the direct tax laws '(amendment) act, mentof4 of 1988 19871,— sectio11^ (a) in sub-section (1),—(i) after clause (c) and before the explanation, the fo'llow-35 ing clause shall be inserted, namely: —" (d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution;";(ii) in the explanation, in clause (2),—4 0  (1) the words, brackets and figure "or sub-section (2)"shall be omitted;(2) the words " whether fixed originally or on exten­sion" shall be omitted;(b) in eub-section (57,—4 5  (i) in clause (i'ii), for the words and figures "government' company as defined in section 617 of the companies act 1956",the word? "public sector company" shall be substituted; (ii) after clause (xi), the following clause shall be inserted, namely:—" (acii) any other form or mode of investment or deposit as may be prescribed" 6  6 1  »ection 32a of the income-tax act,— ^(a) in sub-section (i),—amend­ ment of section 32a(i) for the words "provided that", the following shall be substituted, namely; —"provided that in respect of a ship or an aircraft acquir- ed or machinery or plant installed after the 31st day of 10 march, 1988, this sub-section |hall have effect as if for the words "twenty-five per cent", the words "twenty per cent" had been substituted:provided further that";(ii) the following explanation shall be added at the and, namelt: —'explanation—^for the purposes of this sub-section, •'actual cost" means the actual cost of the ship, aircraft, machinery or plant to the assessee as reduced by chat part of such cost which has been met out of the amount releasfed to 2 0  ' the assessee imder sub-section (6) of section 32ab"j(b) in sub-section (2), after clause (b), the following proviso shall be inserted, namely: —"provided that nothing contained in clauses (a) and (b) shall 2 5  apply in relation to—(i) a new ship or new aircraft acquired, or fii) any new machinery or plant installed, after the slat day of march, 1987 but before the 1 st day of april, 1988;";(c) in sub-section (2c), after the words, figures and letters "the "  31st day of may, 1983", the words, figures and letters "but before the 1st day of april, 1987 ' shall be inserted;(d) in sub-section (4), in clause (ii), in sub-clause (a), for the werds "the proviso", the words "the second proviso" shall be substitwted; i(e) in sub-section (5), in clause (b), for the words "the proviso", the words "the second proviso" shall be substituted;(/) for sub-section (8b), the following sub-sections shall be substituted, namely: —" (5b) notwithstanding anything contained in sub-section(8 ) or any notification issued thereunder, the provisions of t h is ^  section shall apply in respect of a ship or aircraft acquired or any machinery or plant installed after the 31st day of march, 1988 but before such date as the central government, if it considers necessary or expedient so to do, may, by notification in the official gazette, specify in thip behalf(8c) subject to the provisions of clause (ii) of sub-section(3), where a deduction has been allowed to an assessee und«r sub-section (i) in any assessment year, no deduction shall be allowed to the assessee under section 32ab in the said assessment 5  year and in the four assessment years immediately succeedingsuch assessment year" 7 in section 32ab of the income-tax act, for sub-section (10), the amendfollowing sub-section shall be substituted, namely:— mentof" (10) where a deduction has been allowed to an assessee under 32ab 10 this section in any assessment year, no deduction shall be allowed to the assessee under sub-section (1) of section 32a in the said assess­ ment year and in the four assessment year$ immediately succeeding such assessment year''8 in section 35 of the income-tax act [as it stood immediately before amend- 15 its omission by section 10 of the direct tax laws (amendment) act mentof1687],—- section35(o) in clause (ii), in the proviso, after the words "prescribed authority", the words "by notification in the official gazette" shall be inserted;2 0  (^) in clause (in), after the words "prescribed authority'', thewords "by notification in the official gazette" shall be inserted;(c) the following provisos shall be inserted at the end, namely:—"provided that the scientific research association, university, college or other institution referred to in clause (ii) or clause 25 (iii) shall make an application in the prescribed form and mannerto the prescribed authority for the purpose of grant of approval, or continuance thereof, under clause (ii) or, as the case may be, clause (iii):provided further that the prescribed authority may, before 30 granting approval under clause (ii) or clause (iii), call for suchdocuments (including audited annual accounts) or information from the scientific research association, university, college or other institution as it thinks necessary in order to satisfy itself about the genuineness of the activities of the scientific research 35 association, university, college or other institution and thatauthority may also make such inquiries as it may deem necessary in this behalf:provided also that any notification issued by the pres­cribed authority under clause (ii) or clause (iii) shall, at any 40 one time, have effect for such assessment year or years, notexceeding three assessment years (including an assessment year or years xommencing before the date on which such notificationis issued) as may be specified in the notification"9 in section 40 of the income-tax act, after clause (b) [as it stood amend- 45 immediately before its substitution by clause (ii) of section 13 of the direct tax laws (amendment) act 1987], the following clause shall h e  inserted, namely;—(ba) in the case of an association of persons or body of indi- vidvials (other than a company or a cooperative society or a society registered under the societies registration act, 1860 or under any law corresponding to that act in force in any part of india), any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such association or body to a member of such association or body ^explanation 1-—where interest is paid by an association or body to any member thereof who has also paid interest to the association or body, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the association or body to the member exceeds the paynient of inter-1 0  est by the member to the association or bodyexpldfiation 2 —where an individual is a member of an associa­tion or body on behalf, or for the benefit of any other p^son (such member and the other person being hereinafter referred to as ■"member in a representative capacity'' and "person so represented", 15 respectively),—(i) interest paid by the association or body to such individual or by such individual to the association or body otherwise than as member in a representative capacity, shall not be taken into account for the purposes of this clause; 20(ii) interest paid by the association or body to such indi­vidual or by such individual to the association or body as member in a representative capacity and interest paid by the association or body to the person so represented or by the person so repre­ sented to the association or body, shall be taken into acxount for 30 the purpose of this clause35explanation 3—where an indh'idual is a member of an associa­tion or body otherwise than as member in a representative capacity, interest paid by the association or body to such individual shall not be taken into account for the purposes of this clause, if such interest is received by him on behalf, or for the benefit, of any other person'26 of 198810 in section 44ac of the income-tax act (as inserted by section 15 of the finance act 1988), in sub-section (1), in clause (a), the following proviso shall be inserted, namely; —amend­ment of section 44ac    "provided that nothing contained in this clause shall apply to a ^  buyer where the goods are not obtained by him by way of auction and where the sale price of such goods to be sold by the buyer is fixed by or under any state act;"   il in section 64 of the income-tax act, in sub-section (i) [as it stood immediately before its amendment by section 17 of the direct tax laws 4 5  (amendment) act, 1987],—                                                                              4 of 1968amend­ment of section 64    (a) in clauses (v) ;ind (vii) the bracket; and words "(not being a married daughter)" shall be omitted;     (b) for explanation 3, the following explanation shall be yabsti- tuted, namely; —   'explanation 3—for the purposes                                         of clauses (iv), (v) and 5 0(in), where the assets transferred directly pr indirectly by an          individual to his spouse or                                         minor chud or son's wife or son's           minor child (hereinafter in this explanation referred to as "the           transferee' ) are invested by the transferee in any business, that           part of the income arising out of the business to the transferee           in any previous year, which bears the same proportion to the           income of the transferee from the business, as the value of the            assets aforesaid as on the 1st day of the previous year bears to           the total investment in the business by the transferee as on the           said day, shall be included in the total income of the individual 10           in that previous year'                     12                               a fter section 67 of the income-tax act [as it stood im m ediatdy                  before its substitution by section 18 of the direct tax laws (amendment)4 of 1988,                  act, 1987], the following section shall be inserted, namely:—insertion of new section 67a15?l of i86020    '67a (i) in computing the total income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known (other than a company or a cooperative society or a society registered under the societies kegistration act, 1860 or under any law corresponding to that act in force in any part of india), whether the net result of the computation of the total income of such association or body is a profit or a loss, his share (whether a net profit or net loss) shall be comput­ed as follows, namely: —method of com­puting a member's share in the income of asso­ciation ofpersons or body ofindi­viduals25     (o)                 any interest, salary, bonus, commission or remuneration by whatever name called, paid to any member in respect o^' the previous year shall be deducted from the total income of the association or body and the balance ascertained and apportioned among the members in the proportions in which they are entitled to share in the income of the association or body;(b) where the amount apportioned to a meniber under clause 30 (o) is a profit, any interest, salary, bonus, commission or re­m uneration aforesaid paid to the member by the association or body in respect of the previous year shall be added to that amount, and the result shall be treated as the member's share in the income of the association or body;35 (c) where the amount apportioned to a member under clause(o) is a loss, any interest, salary, bonus, commission or re­m uneration aforesaid paid to the member by the association or body in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the member's share in the income of the association or body40(2) the share of a member in the income or loss of the associa­tion or body, as computed under sub-section (1), shall, for the pur­ poses of assessment, be apportioned under the various heads of income in the same m anner in which the income or loss of the association or body has been determined under each head of income45          (3) any interest paid by a member on capital borrowed by him       for the purposes of investment in the association or body shall, in       computing his share chargeable under the head "profits and gains of       business or profession'' in respect of his share in the income of the50       association or body, be deducted from his shai'eexplanation—^in this section, "paid" has the same meaning as is assigned to it in clause (2) of swtion 43'13 in section 80c of the income-tax act,—(a) in sub-section (2 ),—amend­ment of section 80c    (i) in clause (d), the words "or ten thousand rupees, which-                                                                   5  ever is less'' shall be omitted;    (ii) in clause (h ), in sub-clause (ii), in item (c), in sub-item(6 ), after the words' "public company", the words "or a public sector company or a university established by law or a college affiliated to such university" shall be inserted;                                                                           1 0    (b) in sub-section (8), after clause (c), the following clause shall be inserted, namely;—    '(d) "contribution" to any fund shall not include any sums in repayment of loan"   14 in section 80cc of the income-tax act, in sub-section (3), in clause j ^(a), after sub-clause (ii), the following                                            sub-clause shall be                                                                 inserted, namely:—amend­ment of eection bocc" (iii) a hotel approved by the prescribed authority;"  15 in section 80hhc of the income-tax act [as amended by section24 of the finance act, 1988],—                                                                     2 0  26of l9 ggamend­ment of section 80hhc    (a) in sub-sections (1 ) and (la ), for the words "whole of the income", the word "profits'' shall be substituted;    (b) in sub-section (4), for the                                        words "net                                                      foreign exchange realisation as determined in accordance with the import and export policy of the government of                                  india for the relevant period",                                                                     the 25 words "export turnover'' shall be substituted;    (c) in sub-section (4a), in clause (a), for the word "income", the word "profits" shall be substituted;(d) in the explanation,—                                                                   i(i) clause (c) shall be omitted;                                                                3©    (ii) clauses (d) and (e) shill be renumbered as clausea (c) and (d) respectively  is after section 80hhc of the income-tax act, the following section shall be inserted, namely; —insertion of new section 60hhddeduction in respect of earn- in«s in converti- ble foretgn exchange   '80hhd {1) where an assessee, being an indian company or a 3 5  person (other than a company) resident in india, is engaged in the business of a hotel                     approved by the prescribed                                                  authority in this behalf or of a travel agent, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of a sum equal to the aggregate 40 of—      (a)                  fifty per cent, of the profits derived by him from fsrvicm provided to foreign tourists; and                                                                                      '(b) so much of the amount out of the r«maiaing ]»rofitb referred to in clause (a) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the5 purposes of the business of the assessee in the manner laid downin sub-section (4)(2) this section applies only to services provided to foreign tourists the receipts in relation to which are received by the assessee in convertible foreign exchange10 (3) for the purposes of sub-section (1), profits derived fromservices provided to foreign tourists shall be,—(o) in a case where the business carried on by the consists exclusively of services provided to foreign tourists resulting in receipts in convertible foreign exchange, the 15 profits of the business as computed under the head "profits and gains of business or profession";(b) in a case where the business carried on by the assessee does not consist exclusively of services provided to foreign tourists resulting in receipts in, convertible foreign ex-20 changa, the amount which bears to the profits of the business(as computed under the head "profits and gains of business or profession") the same proportion as the receipts in convertible foreign exchange bear to the total receipts of the business carried on by the assessee25 (4) the amount credited to the reserve account under clause (b)of sub-section (i), shall be utilised by the assessee before the expiry of a period of five years next fohowing the orevious year in which the amount was credited for the following purposes, namely:—(a) construction of new hotels approved bv the prescribed30 authority in this behalf or expansion of facilities in existinghotels already so approved;(b) purchase of n<wr cars and new coaches by travel agents;(c) purchase of sports equipment for mountaineering, trekhng, golf, river-,rafting and other sports in or on water;3 5  (d) construction of conference or convention centres;(e) provision of such new facilities for the growth of indian tourism as the central government may, by notification in the qflrcial gazfi'tte sjiedfy in this behalf: provided that where any of the activities referred to in clauses 40 (c) to («) would result in cresition of any asset owned bv the assesseeoutside india, such asset shoxih be creatc/j only after obtaining prior approval of the prescribed authority '(5) where anv amount credited to the resen^e account under clause (b> of sub-section (i)45 (a) has been utilised for anv r)iirno«:e nt^'er than those refer­red to in snb-section (4) the amount so utilised: or(b) has not been utilised in the manner specified to sub­section (4) the amoimt not so utlhsed•hall be doemed to be the profits,—(i) in a case referred to in clause (a), in the year in whidi the amount was so utilised; or(it) in a case referred to in clause ( b ) i n  the year imm®- diatdiy following the period of five years specified in sub-section 5(o and shall be charged to tax accordingly(6 ) the deduction iinder sub-section ( 1 ) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the 1 0  explemation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the amoimt of- convertible foreign exchange received by the rssessee for services provided by him to the foreign touristsexplanation—^for the purposes of this section,—(a) "travel agent" means a travel agent or other person (not being an airline or a shipping company) who holds a valid licence granted by the reserve bank of india under section 32of the foreign exchange regulation act 1973; 46 of 1973(b) "convertible foreign exchange'' shall have the meaning 2 0  assigned to it in clause (a) of the explanation to section 80hhc;(c) "seritces provided to foreign tourists" shall not include services by way of sale in any shop owned or managed by the person who carries on the business of a hotel or of a travel agent'am«nh 17- itt section 8 6  of the income-tax act [as it stood immediately before 25mant of its substitution by section 29 of the direct tax laws (amendment) act,•®ction 19®7], for clause (r )  the following clause shall be substituted, • i?'®®- - namely;—" (v) if the assessee is a member of an association of persons or a body of individuals (other than a company or a cooperative society 30 - or a society registered imder the societies registration a ct, 1880 or 21 oi iiwunder any law corresponding to that act in force in any part of india)', his share in the income of the association or_body computed in the manner provided in section 67a:provided that— 3 5(o) where the association or body is chargeable to tax on its total income at the maximum marginal rate or any higher rate, under any of the provisions of this act, the share of a member computed as aforesaid shall not be included in his total income;(b) in any other case, the sharo of a member computed as ^  aforesaid shall form part of his total income; provided further that where no income-tax i$ chargeable 6 n the tettl income of the association or body, the share of a member comimtod as a fo n n ld  laall be chargeable to tax as part of hlg total laeome and aotmng contained in this section shall apply to the is in section 115a of the income-tax act, in sub-section (j),— am«nd-(i) after clause (aa), the following clause shall be inserted, n a m ely :- h5a" (<ib) income ireceived in respect of units, purchased in5 foreign currency, of a mutual fund specified under clause (23d)of section 10; or";(ii) after clause (ia), the following clause shall be inserted, nam dy:—" (ib) the amount of income-tax calculated on the income in 10 respect of units referred to in clause (ab), if any, included in the total income, at the rate of twenty-five per cent;";(iii) in the explanation,—clause (l)) shall be omitted;(b) clause (h b ) shall be re-lettered, as clause (b) 15 19 in section 115j of the income-tax act, in sub-section (1),— aipendment of(o) in the opening portion, after the words "a company", the section bradcets and words " (other than a company engaged in the business of generation or distribution of electricity)" shall be insetted;(b) in the explanation,—20 (0 in clause (b), after the words "any reserves", the brac­kets, words, figures and letters ' (other than the reserves speci­ fied in section 80hhd)" shall be inserted;(ii) in cla'jse (f), for the word "applies,", the words "apjdies; or" shall be substituted;25(iii) after clause (f) the following clauses shall be inserted, namely:— r /   '" (g) the amoimt withdrawn from the reserve account under section 80hhd, where it has been utilised for any purpose other than those referred to in sub-section (4) of that section; or •30(h) the amount credited to the reserve account under section 80hhd to the extent that amount has not been uti­lised within the period spedfied in sub-section (4) of that section,";(iu) for the words "if any such amoimt is debited", the words, brackets and letters "if any amount referred to in clauses (a) to (/) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited" shall be substituted;(v) in clause (i), after the words "from reserves", the brac- 4 0  kets, words, figures and letters " (other than the reserves speci­fied in section 80hhd)" shall be inserted;(vi) clause (iii) shall be renumbered as clause (iv ) and fore clause (iv) as so renumbered, the following clause shall be inserted, namely:—" (iii) the amounts [as arrived at after increasing the net profit by the amount referred to in clauses (») to ^and reducing the net profit by the amounts referred to in clauses (i) and (ii)] attributabje to the business, the profits from which are eligible for deduction imder section 80hhcor section 80hhd; so, however, that such amounts are com­puted in the manner specified in sub-section (3) 6 f section 5 80hhc or sub-section (3) of section 80hhd, as the may be; or'20 in section 139 of the income-tax act [as amended by section 42 8 ^0 ^  of the direct tax laws (amendment) act, 1987],—139 (a) fo r sub-sectio n  (4a ), th e  follow ing sub-section sh a ll b e  sub- 10stitu te d , n am ely : —" (4a) every person in receipt of income derived from pro­perty held under trust or other legal obligation wholly for chari­table or religious purposes or in part only for such pmposes, or of income being voluntary contributions referred to in sub-clause j5  (iia) of clause (24) of section 2, shall, if the total income in res­pect of which'he is assessable as a r^resentative assessee (the total income for this purpose being computed under this act without giving effect to the provisions of sections 1 1  and 1 2 ) exceeds the maximum amount which is not chargeable to incometax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and set­ting forth such other particulars as may be prescribed and au the provisions of this act shall, so far as may be, apply as if it were a return required to be furnished under sub-section ( i ) "; 2 5(b) in sub-section (1 0 ) in the proviso, for clause (d), the fol­lowing clause shall be substituted, namely; —" (d) a return of a person who has claimed exemption of in­come from property held for charitable or religious purposes;"amend- 21 in section 143 of the income-tax act [as substituted by section 48 3 0  4  of 1m8ment of of the direct tax laws (amendment) act, 1987]—smtion sub-section (i), in clause (a), after the proviso^ the fol-lowing proviso shall be inserted, namely;—"prcjvided further that an intimation for any tax or interest due under this clause shall not b® sent after the expiry of two 3 5  years from the end of the assessment year in which the income was first assessable"; (b) after sub-section (i), the following sub-section shall be in­serted, namely: —' (la) (a) where, in the case of any person, the total income, ^  as a result of the adjustments made under the proviso to clause (0) of sub-section (i), exceeds the total income declared in the return by any amount, the assessing officer shall,—(i) further increase the amount of tax payable imder sub­section (i) by an additional income-tax calculated at the ^  rate of twenty per cent, of the tax payable on such excess amotmt and specify the additional income-tax in the intima­tion to be sent under sub-clause (i) of clause (a) of •sub­section (i);(ii) where any refund is due under sub-section (i), re- 50duce the amaant of such refund by an amount equivalent to thte' addftatnal inmwe-tax caltulbtetf uwjer sub-dawste(b) wliere as a result of an order under section 154 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264, the amount on which additional income-tax is pay­ able under clause (a) has been increased or reduced, as the case5 may be, the additional income-tax shall be increased or reduced accordingly, and,—(i) in a case where the additional income tax is increased, the assessing ofl&cer shall serve on the assessee a notice of demand under section 156;10 (ii) in a case where the additional income-tax is reduced,the excess amount paid, if any, shall be refundedexplanation—for the purposes of this sub-section, "tax payable on such excess amount" means,—m(i) in any case where the amount of adjustments made 15 imder the proviso to clause (a) of sub-section (1) exceed thetotal income, the tax that would have been chargeable had the amount of the adjustments been the total income;(it) in any other case, the difference between the tax on the total income and the tax that would have been charge- 20 able had such total income been reduced by the amount ofadjustments'22 in section 144a of the income-tax act, in the explanation, for the word "sub-section", the word "section"' shall be substitutedamend­ment of section 144aamend­ment of section14723 section 147 of the income-tax act [as substituted by section 544of 1988  25 direct tax laws (amendment) act, 1987], for the words ", for rea­sons to be recorded by him in writing, is of the opinion", the words "has reason to believe" shall be substitutedamendment of section148,24 section 148 of the income-tax act [as substituted by section 54 of4 0t 1988 direct tax laws (amendment) act, 1987], shall be renumbered as- 30 sub-section (1) thereof and after sub-section (i) as so renumbered, the following sub-section shall be inserted, namely:—^ "(2) the assessing officer shall, before issuing any notice underthis section, record his reasons for doing so"3525 in section 155 of the income-tox act, in sub-section (4a), in clause (b), for the words "the proviso", the words "the second proviso" shall be substitutedamend, ment of section 155 4 of i m 26 in chapter xv of t h e  income-tax act, for the sub-heading ''dd— association of persons—special cases' [ a s  it stood immediately before its substitution by section 66 of the direct tax laws (amendment) act, 40 1987], the sub-heading "dd— association of persons and body of indivi- duals' shall be substitutedsubstitu­tion of new sub­heading for sub­heading dd of chapter xvomission of section 167a27 section 167a of the income-tax act [as it stood immediately before its substitution by section 6 6  of the direct tax laws (amendment) act,1987] shall be omitted4«tl988,28 after section 167a of the income-tax act (as omitted by section 27 of thifc act), the following section shall be inserted, namely:—insertion of new section 167b   "167b (j) where the individual shares of the m«nbers of an an association of persons or body of individuals (other than a eom- pany or a cooperative society or a society registered under the socie­ties registration act, 1860 or under any law corresponding to that                                                                   21 of 1800act i» force in any part of india) in the whole or any part of the jo income of such association or body are indeterminate or imknown, tax shall be charged on the total income of the association or body at the maximum marginal rate:charge of tax w h ^shares of members in associa tion of persons or body of indivi­duals un­known etc     provided that, where the total inome of any member of such    association or body is chargeable to tax at a rate which is h i^ e r  15   than the maximum marginal rate, tax shall be charged on the total   income of the association or body at such higher rate     (2)                  where, in tiie case of an association of persons or body of individuals as aforesaid [not being a case falling under sub-section (1) 1-                                                                                                20    (i) the total income of any member thereof for the previous year (excluding his share from such association or body) exceeds the maximum amount which is not chargeable to tax in the case of that member under the finance act of the relevant y»ar, tax shall be charged on the total income of the association or body 25 at ihe maximum marginal rate;    (ii) any member or members thereof is or are chargeable to tax at a rate or rates which is or are higher than the maximum marginal rate, tax shall be charged on that portion or portions of the total income of the association or body w hichis or a r e 30 rdatable to the share or shares of such member or members at such higher rate or rates, as the ease may be, and tiie balance of the total income of the association or body shall be taxed at the maximum marginal rate   explanation—for the purposes of                                        this section, the individual 3 5  shares of the members of an association of persons or body of indivi­duals in the whole or any part of the income of such association or body shall be depmed to be indeterminate or unknown if such ^ares (in relation to the whole or any part of such income) are indeter­minate or unknown on the date of formation of such association or 4 0  body or at any time thereafter" amend bmbt oi im29 in section 190 of the income-tax act in sub-section (i), after the words "pajrable by deduction", the words "or collection" shall be inserted and diall be deemed to have been inserted with effect from the 1 st day o c j w ,  lo e e  30 in section 104a of the income-tax act, in iub-mction (3), aftr clatise (iii), the following clause shall be inserted and shau be deemed to have been inserted with effect from the 1st daj-^ of april, 1988, namely:—aaaendm ent ofsectionima    " (iu) to such income credited or paid by a firm to a partner of the firm;''     31                 section 194e of the income-tax act shall be omitted and shall be                                                                                                              onissfoa deemed to have been omitted with effect from the 1st day of april, 1988                                                                                                            sectioni94e     32                for section 196a of the income-tax act, the following section shall be substituted, namelv: —substitu- tion of new section for sec tion 196a^10 "196a (i) subject to the provision? of sub-section (2), no de­duction of tax shall be made from any income payable in respect of units of a mutual fund, specified imder clause (23d) o f section 10, to its units-holders being persons other than foreign companiestax notto be deducted from any income pajrable to unit­holders of mutual fund(2) where any income referred to in sub-section (i) is payable 15 to a unit-holder, being a foreign company, the person responsiblefor making the payment shall, at the time of credit of such income to the account of the payee or at the time of pasrment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of 20 twenty-fiv^ per cent"33 in sections 198, 199, 200, 202, 203, sub-section (1) of section 203a, section 205 and sub-section (5) of section 215 of the income-tax act, for the words and figures "and section 195", the words, figures and letter section 195 and section 196a" shall be substitutedamend­ment of sections 198, 199, soo, 202, 203, 203a, 205 and 215s4 in section 206c of the income-tax act,—25amend, ment of section 206c(a) in sub-section (/), in the table, in column (3) against item(iii), for the words "ten per cent", the words "five per cent'» shall be substituted and shall be deemed to have been substituted w th effect from the 1st day of june, 1988;30(b) after sub-section (5), the following sub-section shall be in­serted namely: —35" (5a) every person collecting tax in accordance with the provisions of this section shall prepare half yearly returns for the period ending on 30th september and 31st march in each year, and deliver or cause to be delivered to the pres­cribed income-tax authority such returns in such form and v ^ -  fled in such manner and iettlng-forth such particulars and with­in such time as rm y he jmseaceibed ,",amendment ofsection209    m in section 209 of the income-tax act^ in sub-section (1), in claum(d), for the words "deductible at source", the words "deductible or collectible at sofurce" shall be substituted and shall be deemed to have been substituted witli effect from the 1st day of june, 19884 of 1988     36                in sections 2 2 2 , 223, 224, 225, 226 228 and 228a of the income- tax act [as they stood                                  immediately before their                                                                      amendment by the direct tax laws (amendment) act 1987], for the words "income-tax officer", wherever they occur, the words "assessing officer" sdiall be substituted and shall be deemed to have been substituted with effectamend­ment of sections 222 223224, 225,226 228and 228a                  ^st day of april 198810amend­ment of section 228     37                in section 226 of the income-tax act (as amended by section 36 of this a ct), in sub-section (2), (3), (4) and (5), after the words "as­sessing officer", wherever                                       they occur,                                                         the words                                                                          "or tax recovery officer" shall                        inserted     38                &  section 234a of the income-tax act [as inserted by section 94 15 _ of the direct tax i>aws (amendment) act, 1987],—                                                                                                      4 of 1988,(c) in sub-section (!>,—amend­ment of section 234a    (i) for the words "the tax on the^^otal income as determined on regular assessment as reduced by the advance'tax, if any, paid and any tax deducted at source", the words, brackets and 2 0  figures "the tax on the total income as determined under sub­section (i) of section 143 or on regular assessment as reduced by the advance tax if any paid and any tax deducted or collectedat source'' shall be substituted;     (ii) for explanation 2 the following explanation shall be 25 substituted, namely: —     'explanation 2 —in this sub-section, "tax on the total income as determined under suo-section (i) of section 143" shall not include the additional income-tax if any, payable under section 143';                                                              30        (iii)                         after explaruition 3, the following explanation shall 6 e inserted, namely; —    'explanation 4—in this sub-section,                                           "tax on                                                     the total income as determined under sub-section (i) of section 143 or on regular assessment" shall, for the purposes of compu- 3 5  ting the interest payable under section 140a be deemed to be tax on total income as declared in the return';(b) in sub-section (3),—    (i) after the words and figures "under section 148 issued", the words, brackets and figures                                   "after the                                               determination                                                              of 40 income under sub-section (1) of section 143 or" shall be                                                             in­serted;    (ii) for the words "income determined on the basis of the earlier assessment aforesaid" the words, brackets and figures "income determined under isub-section (i) of section, 143 or on 45 tfaa          of the earlier assessment aforesaid'' shall he substituted; (iii) the explanation shall be omitted3s in section 234b of the income-tax act [as inserted by section 94 amend4 of 1388 of the direct tax laws (amendment) act, 1987],— ment of section(a) in sub-section (i),— 234b5 (i) for the words "to the date of the regular assessment',the words, brackets and figures "to the date of determination of total income under sub-section (1) of section 143 or regular assessment" shall be substituted;(ii) for explanation 1, the following eocplanation shall be jq substituted, namely: —^ 'explanation 1—in this section, "assessed tax" means,—(o) for the purposes of computing the interest pay­able under section 140a, the tax on the total income as declared in the return referred to in that section;(b) in any other case^ the tax on the total income determ&ied under sub-section (i) of section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of chapter xvii 20 on any income which is subject to such deduction or collec­tion and which is taken into account in computing such total income';(iii) for explanation 3, the following explana^on shall be substituted, namely:—f 25 'explanation 3—in explanation 1 and in sub-section(3), "tax on the total income determined under sub-section (1) of section 143'' shall not include the additional incometax, if any, payable under section 143';(b) in sub-section (2), in the opening portion, after the words 30 "date o f', the words, brackets and figures "determination of total in­come under sub-section (i) of section 143 or" shall be inserted;(c) in sub-setion (3),—35(i) for the words "the date of the regular assessment", the words, brackets and figures "the date of determination of total income under sub-section (i) of section 143 or regular assess­ment" shall be substituted;(ii) for the words "income determined on the basis of the regular assessment aforesaid", the words, brackets and figures "income determined under sub-section (i) of section 143 or on40 the basis of the regular assessment aforesaid'' shall be substitu­ted;(iii) the explanation shall be omitted40 in section 234c of the income-tax act, in sub-section (1),—amend­ment o f section 234c     (o)                  the following proviso shall be inserted before the explana­tion, namely;—    "pi'ovided that nothing covitained in this sub-section shall apply to any shortfall in the payment of the tax due on the re-                                                                   5  turned income where such shortfall is on account of under-esti­mate or failure to estimate,—(o) the amount of capital gains; or     (b)                 income of the nature referred to in sub-ciause (ix) of clause (24) of section 2,                                                                                                                                     jqand the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) or clause (b), as the case may be had such income been a part of the total in­come, as part of the instalment of advance tax which is imme­diately due'';                                                                  15     (b)                 in the explanation, for the words, figures and letter "th? amount of tax deductible at source in accordance v,-ith the provisions of chapter xvii b on any income which is subject to such deduc- tioa", the words and figures "the amount of tax deductible or col­lectible at source in accordance with the provisions of chapter xvii 2 0  on any income which is subject to such deduction or collection" shall be substituted;   41 in section 244a of the income-tax act [ag inserted by section 99 of the direct tax laws (amendment) act, 1987],—amend­ment of section 244a(a) in sub-section (i),—                                                                 25    (i) for the words "where, in pursuance of any order passed under this act refund of any amooint becomes due to the asses- see'', the words "where refund of any amount becomes due t® the assessee under this act" shall be substituted;(ii) in clause (a),—                                                                 30    (a) in the opening portion, after the words "out of any tax", the words, figures and letter "collected at source under section 206c or" shall be inserted;    (b) in the proviso, after the words "tax as determined", the words, brackets                       and figures "under sub-section (jf) of 35 section 143 or ' shall be inserted;    (b) in sub-section (3) after the words "an order under'', the words, brackets and figures "sub-section (3) of section 143 or" shall be inserted    42 in the sub-heading to chapter xx of the income-tax act                                                                                     [as 4 0  substituted by section 99 of the direct tax                                                         laws (amendment)                                                                                    act,1987j, the words "or applications" shall be omitted                                                                                              4ofi»t'8amend­ment of subhead- ing to chapter xx43 in section 246 of the income-tax act [as substituted by section 4 of 1988 emrect tax laws (amendment) act, 1987],—(a) in sub-section (i),— amendment section248(i) clauses (g) and (h), the words, figures and letters "in5 respect of any as:;ossment for the assessment year commencingon the 1st day of april, 1988 or aniy earlier assessment year''occurring at the end shall be omitted;(ii) in clause (i),—i(1) in sub-clause (ii), for the words, figures and letters10 "section 271e or section 272a" the words, figures and letters"section 271e, section 272a, section 272aa or section 272bb" shall be substituted >(2) in sub-clause (hi), the words, brackets and figures^ "sub-section (1) of section 271,'' shall be'omivted;15 (b) in sub-section (2),—(i) in clause (b), after the words, brackets and figurt"sub-section (1)'\ the words, figures and letters "or an order under section 104, as it stood immediately before the 1st day of april, 1988 in respect of any assessment for the assessment20 year commencing on the 1st day of april, 1987 or any earlier assessment year," shall be inserted;(ii) after clause (f), the following clause shall be inserted, namely: —" (ff) an order made hy a deputy commissioner im-2 5  posing a penalty under section 272aa;";(hi ) for clause (g), the followng clause shall be substitut­ed, namely;—i30 ' " (g) an order imposing a penalty under chapter xxiby the income-tax officer or the assistant commissioner, where such penalty has been imposed with the previous approval of the deputy commissioner under sub-section (2) of section 274;'44 section 246a of the income-tax act [as inserted by section 99 of the direct tax la^vs (amendment) act, 1987] shall be omitted-4 of 1988omission of section 246a35 45 in section 249 of the income-tax act, in sub-section (4), in theproviso—iamend­m ent of section 249(j) after the words "provided that,", the words, brackets and letter "in a case falling under clause (b) and'' shall be inserted;(ii) for the words "this sub-section", the words "that clause" 40 shall be substituted46 in section 253 of the income-tax act, in sub-section ( 0 —| am end-   |     ||-----------|-----|| ment of   |     || section   |     || 253      |     |(t) in clause (a), the words, brackets and figures "sub-section(2) of section 131," shall be omitted;(ii) in claude (c), the words, figures and letter "or an order passed by a chief commissioner or a director general or a director under section 272a ' shall be inserted at the end ,47 in section 255 of the income-tax act, in sub-section (?), for the words •'forty thousand rupees", the words "one lakh rupees" shall be 5 substituted-amend­ment of section 255amend­ment of section 296a  48 in section 269a of the income-tax act, in clause (b), for                                                                    the words "an assistant commissioner of income-tax", tie words " a depu­ty commissioner" shall be substituted and shall be deemed to                                                                   have been substituted with effect from the 1st day of april, 1988,                                                                       10amend­ment of section 2«9b   49 in section 269b of the                                income-tax act, in                                                     sub-section                                                                   (3 ),                                                                        in clause (a), for the words "assistant commissioners of income-tax", the words "deputy commissioners" shall be substituted and shall be deem­ed to have been substituted with effect from the 1st day of april, 1988amend­ment o f section 271  50 in section 271 of the income-tax act                                              [as it stood                                                           immediately 15 before its substitution by section 106 of the direct tax laws                                                               (amend­ment) act, 1987],—                                                                          4of 1»88        (a) in sub-section (j),—i(i) clause (a) shall be omitted;                                                         j(ii) clause (i) shall be omitted;                                                               2 0     (hi) for clause (ii) the following clause shall be substitut­ed namely: —    " (ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum which shall not be less than one thousand rupees but which maiy extend to twenty- 2 5  five thousand rupees for each such failure;'';(ir) in clause (in)—      (1 )                   for the word be substituted;                                  'twice' the words "three times" shall(2 ) the proviso shall be omitted;                                                                                      3 0    (r) for explanation 3 the following explanation shall be substituted, namely: —^             f        "explanation 3—where any person                                                  who has not pre­    viously l^een assessed under this act, fails, without reason­    able cause, to furnish within the                                            period specified in sub- 3 5      section (l) of section 153 a return of his income which he is     required to furnish under section 139 in respect of any assess­    ment year commencing on or after the                                                 1st day of                                                               april,     1989, and until the expiry of the period aforesaid, no notice     has been issued to him under clause (i) of sub-section (i) 4 q     of section 142 or section 148 and the assessing officer                                                                   or     the deputy commissioner (appeals) or the                                                       commissioner      (appeals) is satisfied that                                    in respect of such                                                          assessment     year such person has taxable income,                                                 then, such                                                              person     shall, for the purposes of clause (c) of this sub-section, be 4 5      deemed to have concealed the particulars of his income inrespect of such assessment »year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148";( v i)  in e x p la n a tio n  5, in cluase (2), the words, brackets and letters "clause (a) or clause (b) o f' shall be omitted{ v ii ) after e x p la n a tio n  5, the following e x p la n a tio n  shall be inserted, namely: —10" e x p la n a tio n  6,—where any adjustment is made in the income or loss declared in the return under the proviso to clause (a ) of sub-section (j) of section 143 and additional tax charged under that section, the provisions of this sub­section shall not apply in relation to the adjiistment so made";15(b) sub-section (3) shall be omitted;(c) after sub-section (4), the following sub-section shall be in­serted, namely:—^2025" (5) the provisions of this section as they stood immediate­ly before their amendment by the direct tax laws (amend­ment) act, 1988 shall apply to and in rdation to any assess­ ment for the assessment year commencing on the 1st day of april, 1988, or any earlier assessment year and references in this section to the other provisions of this act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year"51 in section 273a of the income-tax act [as amended by section amend-4 of 1988 113 of the direct tax laws (amendment) act, 1987],— ment section(a) in sub-section (1),—i 273a(i) clauses (i) and (hi) shall be omitted;30(ii) clauses (o) and (c) shall be omitted;(hi) for the words, brackets and letters "in all the cases referred to in clauses (a), (b) and (c)", the words, brackets and letter "in the case referred to in clause (?0 ' shall be substitut­ed;, (b) in sub-section (2), clause (a) shall be omitted;35(c) in sub-section (6), after the words "of this section", the words, brackets and figures "as they stood immediately before their amendment by the direct tax laws (amendment) act, 198'8'' shall be inserted40 52 in section 275 of the income-tax act, in clause (p) [as substituted amendsection 2754 o fi 9 8 -< section 116 of the direct tax laws (amendment) act, 19s7], after ment ofthe words "the order of", the words and brackets "the deputy commis­sioner (appeals) or ' shall be inserted53 a fter section 279a of the income-tax act, the following section shall be inserted, nam ely:— ,| insertion   |     ||-------------|-----|| of new      |     || section     |     || 279b       |     || proof of    |     || entries in  |     || records or  |     || documents  |     |•'279b entries in the records or other documents in the custody of an income-tax authority shau be admitted in evidence in any proceedings for the prosecution of any person for an offence under 5 this chapter, and all such entries may be proved either by the pro­duction of the records or other documents in the custody of the income-tax authority containing such entries, or by the production of a copy of the entries certified by the income-tax authority having custody of the records or other documents under its signature and 10 stating that it is a true copy of the original entries and that such original entries are contained in the records or other documents in its custody"  54 in the second schedule to the income-tax act—amend­ment of second sohedule(o) [as it stood immediately before its amendment by the 15 direct tsix laws (amendment) act, 1987], for the u-ords "income- 4 of 1988tax officer", wherexer they occur, the words "assessing officer'' shall be substituted and shall be deemed to have been substituted with effect from the 1st dan- of april, 1988;(b) [as amended by clause, (a) of this section],— 20(j) in rule 2, for the words "when a certificate has been received by the tax recovery officer from the assessing offi­cer'' the words "when a certificate has been drawn up by the tax recovery officer'' shall be substituted; ,(2) in rule 9, for the words "assessing officer', the words 25 "tax recovery officer" shall be substituted;(3) in rule 14, for the words "assessing officer'', the words "tax recovery officer" shall be substituted;(4) in rule 25, in sub-rule (1), for the words "and the as­sessing officer shall bear such sum as the tax recovery ofbcer 30 sh^ l require in order to defray the cost of such arrangements', the words "and he shall have power to defray the cost of such arrangwnents" shall be substituted;(5) in rule 27, for the words "assessing officer", wherever they occur, the words "tax recovery officer" shall be substi- 35 tuted; i(6) in rule 31, for the words "assessing officer" occurring in the proviso, the words "tax recovery officer" shall be substi­tuted)(7) in rule 47, for the words "direct that such coins or notes, 40 or a part thereof suff :ient to satisfy the certificate, be paid over to the assessing officer" the words and figure "direct that such coins or notes shall v :? credited to the central government and the amount so credited shall be dealt with in the manner speci­fied in rule 8'' shall be substituted; (8) in rule 60, in sub-rule (j), in clause (a), the words "for payment to the assessing officer" shall be omitted;(9) in rule 61, for the words "assessing officer", the words''such income-tax officer as may be authorised by the chief commissioner or commissioner in this behalf shall be substi­tuted; i(w) in rule 74, for the words "the tax recovery officer shall proceed to hear the assessing officer and take all such evidence as may be produced by him in support of execution by 10 arrest, and shall then give the defaulter", the words "the tax recoveriy officer shall give the defaulter" shall be substituted;(11) in rule 85, for the words "if at any time after the issue of the certificate by the assessing officer to the tax recovery officer", the words "if at any time after the certificate is drawn15 up by the tax recovery officer" shall be substituted;(12) in rule 90, in sub-rule (1), for the words "assessing officer", the words "tax recovery officer'' shall be substituted55 in the third schedule to the income-tax act—4 of 1068 20amend­ment of third schedule(c) [as it stood immediately before its amendment by the direct tax laws (amendment) act, 19871, for the words "incometax officer", the words "assessing officer'' shjdl be substituted and shall be deemed to have been substituted with effect from the 1st day of april, 1988; i(b) [as amended by clause (a) of this section], after the words "assessing officer", the words "or tax recovery officer'' shall inserted25v56 in the tenth schedule to the income-tax act [as inserted section 125 of the direct tax laws (amendment) act 1967],—by4 of 1988(i) in rule 1,—!amend, ment of tenth schedule30(a) for the words "the proviso", the words "the first pro- \dso or the third proviso'' shall, be substituted;(b) for the words "the said proviso", the words "the said first proviso or, as the case may be, the said third proviso" shall be substituted^3540(it) in rule 3,—^(a) after the proviso, the following provisos shall be in­serted, namely:—i'provided further that the amount of ten thousand rupe­es, specified in column (2) of the said table against sub­section (2) of section 48, shall be increased during the transi­tional previous year only where the long-term capital gain arises as a result of two or more transfers of long-term capital assets and at least one of the said transfers is made during the initial period of twelve months comprised with­in the transitional previo'js year and the remain'nsf trans­45fer or transfers is or are made during the period beyond the said period of twelve inonths comprised wifhin the transitional previous /year;i provided also that where more than one period in res­pect of different sources of income are included iri the transi­tional previous year under the first proviso or the third pro\aso to sub-section (2) of section 3, then the amount or amounts specified in column (2) of the said table shall be 5increased to such extent and in such manner as the board may, having regard to,—(a> length of the period or periods included in the transitional previous year in respect of different sources of incomej(b) length of the transitional previous year; and(c) other relevant factors;prescribe in this behalf'?(b) for the table, the following table shall be substituted, namely:—] 15"t ableamountprovision of act o)(\)rs10(3)section5000 20  25,00012a(b)s ^o nj,000 xsection13 (2xc) 25,00013 (3)rb)section 12,000sectionwi)16 i), proviso 1000 2 5section5000 and 7,500 16,10 section3,600section23(1) (d) (ii) 500024(2), proviso section40,000; 35,000 and 30,00033a(7), proviso section1 /14th of the amouni of cipital expendituresection35a section35abi/6th or i/3rd of the amount paid as lumpsum coqsideiationsection 35d 1/loth of the amount of certain preliminary expensessection 37(2a)5000 and 50,000 3 510000section 40ari2)25,000 and 2,50,000section 44aa (2) (i) and (ii) 4000000 and 10,00,000 section 44ab 10,000section 48(2)6000, 9,000 and 12,000 ^0 section 80c(i)j/lofh of the actuol capital sum ?ssure<fsection 80c(3) 60,000 and 40,000se^ion 80c(4)piovfsion of ilie ac(i)amoiini(2)scction 80c(7) (c)rs10,000 •5 scction 80cc (2)20,000section 80cca(1)30000section 80d(() 3,000section 80l(1)7,000 (occurring in two places)section 80l(i>, hi proviso, 3,00010 section 801(1), 2nd proviso3,000section sopfjxj)40,000 ana 20,000section 80p (2)(ft20,000section 801 /•15,000section 139a(?)50,000' ;;15(iii) for rules 4 and 5, the following rules shall be substituted, namely: —modifica tion in section 8-20"4 where the transitional, previous year comprises a period of eighteen months or more, then, sub'section (1) of section 6 shall be subject to the modification that references therein to the periods of one hundred and eighty-two days, ninety days tod sixty days shall be construed as references, respectively, to the periods of two hundred and seventy-three days, one hundred and thirty-five days and ninety days25modifica­tion ill respect of deprc ciation al­lowance305 where the assessee s income under the head "profits and gains of business or profession" or under the head "income from other sources" for a period of thirteen months or more is included in his total income for the transitional previous year, the allow­ance under clause (ii) of sub-section (1) of section 32 or, as the case may be, under clause (ii) of section 57 in respect of depre­ciation on block of assets calculated in the manner stated in clause (ii) of sub-section (1) of section 32, shall be increased by multiplying it  by a fraction of which the numeralor is the num­ber of months in the transitional previous year and the denomi­nator is twelve:3540provided that where more than one period in respect of in­come under the head "profits and gains of business or profes­sion'' or under the head "income from other sources" are includ­ed in the transitional previous year under the first proviso or the third proviso to sub-section (2) of section 3, the allowance in respect of depreciation on block of assets shall be calculated separately for each such period included in the transitional pre­vious year in the manner stated in clause (ii) of sub-section (i) of section 32 and increased, where necessary, by multipljang it by a fraction of which the numerator is the number of months in such period (after excluding the number of months relatableto the periacl in relation to which depreciation on block of assets has been allowed or is allowable in the previous year relevant to the assessment year commencing on the 1st day of aprij,1988) and the denominator is twelve";(iv) in rule 6 , the following proviso shall be inserted at the 5  end, namely:—"provided that where more than one period in respect of different sources-of income are included in the transitional pre­vious year under the first proviso or the third proviso to 'sub­section (2) of section 3, then the tax shall be chargeable at the 10 average rate of tax, calculated in accordance with the nrovidons of this rule, on the total income of the transitional previous year after excluding from such total income the income relatable to any such period or periods which has already been included or is includible in the total income of the previous year or pre- 15 vious years relevant to the assessment year commencing on the 1st day of april 1988"57 the following amendments (being amendments of a consequen­tial nature) shall be made in the income-tax act, namely: —consequ­ential amend, ments4011988    (1) in'section 80a, in sub-section (3) [as it stood immediately 20 before its substitution by section 21 of the direct tax laws (amend­ment) act, 1987],—    (a) after the figures and letters "bohhc", the words, figures and letters "or section 80hhd" shall be inserted;    (fc) the words, figures and letters "or section 80qq or section 25 «0t" shall be omitted;(2) in section sop, in sub-section (3),—    («) after the words, figures and letters "or section 80hhc", the words, figures and letters "or section 80hhd'' shall be in­serted;                                                                  30    (b) after the figures and letters "80hhc,", the word, figures aad letters "section 80hhd," shall be inserted;      (3 ) in section 184 [as it stood immediately before its substitu­tion          by                section                              6 8                                     of                                          the                                                  direct                                                              tax                                                                       laws                                                                                  (amendment)                                                                                                             4 0 1 1 9 1 8  act, 1987], in rub-section (7), in the proviso, in clause (ii), for the 3 5  words, brackets and figures "sub-section (i) or sub-section (2) ofsection 139 (whether fixed originally or on extension)", the words, brackets and figu'^es ' sub-section (1) of section 139" shall be sub­stituted  chapter iii a m en d m en ts to the w ealth-tax a ct, 1957amend, inent of section 2,58 in section 2 of the wealth-tax act, 1957 (hereafter in this chapter referred to as the wealth-tax act), in clause (m), the explanation shall be renimibered as explanatwm 1 and after explanation 1 as so renum­bered, the following explanation shall be inserted, namely:— ^ 5"explanation 2—where a debt falling under sub-clause (ii) is secured on, or has been incurred in relation to, any asset which is not to be included wholly or partly in the net wealth by virtue of the prpvisions of sub-section (la) of section 5, the amount of such debt shall, for the purposes of the said sub-clause, be limited to the value of the said asset v'hich is not includible in the net wealth under sub-section (la ) of section 5 "59 in section 4 of the wealth-tax act,—(o) in sub-section (1),—amend, ment of section 410(i) for the portion beginning with the words "in computing the net wealth of an individual" and ending with the words "on the valuation date are held—", the following shall be substitu­ted, namely: —"in computing the net wealth—(a) of an individual, there shall be included, as be­longing to that individual, the value of assets which on the valuation date are held—15(ii) for clause (b), the following clause shall be substituted, namely:—20" (b) of an assessee who is a partner in a firm or a mem­ber of an association of persons (not being a co-operative housing society), there shall be included, as belonging to that assessee the value of his interest in the firm or associa­tion determined in the manner laid down in schedule iti:2530provided that where a minor is admitted to the benefits of partnership in a firm, the value of the interest of suck minor in the firm, determined in the manner specified above, shall be included in the net wealth of that parent of the minor whose net wealth (excluding the interest of the minor in the firm referred to in this clause) is greater; and where any such interest is once included in the net wealth of either parent for any assessment year, any such interest in any succeeding year shall not be included in the net wealth of the other parent unless the assessing officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do'';(b) sub-section (2) shall he omitted3560 in section 5 of the wenlth-tax act,—(a) in such section (1) after clause (xvif), the following clause shall be inserted, namely: —amandrr ant of section 540"(xvig) in the case of an individual who is a non-resident indian during the year ending on the valuation date, or a nomi­nee or survivor of such individual or an individual receiving by way of gift from such individual" the bondg specified under sub­clause (lid) of clause (13) of section 10 of the income-tax act:45provided that where an individual, who is a non-resident indian during the year ending on the valuation date in which the bonds are acquired, becomes a resident in india in any subsequent year ending on the valuation date, the provisions of this clause shall continue to apply in relation to such indivi­dual ^explanation—for the purposes of this clause, an individual shall be deemed to be a non-resident indian during the year ^ ending on the valuation date if ini respect of tliat year the indi­vidual is a non-resident indian within the meaning of clause (e) of section 115c of the income-tax act;";(b) in sub-section (la), the following explanation shall be in­serted at the end, namely;— j ] 0'^explanation— ^where a debt is secured on, or has be«i incurred in relation to, any asset referred to in this sub-sectioiv the exemption under this sub-section shall be allowed first against the value of the asset on which or in relation to which such debt is secured or incurred and, theresifter, against the value j ^ of any other asset so referred to";(c) after sub-section (3), the following sub-section sliall be inserted, namely: —" (4f where the assessee is a partner of a firm or member of an association of persons, and the firm or association owns any one or more of the assets which are exempt under sub-section(1), then, for the purposes of his ^sessm ent under this act, the value of his interest in the firfi or association shall be deemed to include the value of a part of each such asset of the firm or association in the same proportion in which he is entitled to 25 share the profits of the firm or association and the assessment shall be made after allowing the exemption under sub-section (j) in respect of those assets on the basis of such proportionate vatue"amend- 61 in section 6  of the wealth-tax act, in explanation la, for the ment o/ word, brackets, figure and letter "clause (4a)'\ tjie words, brackets and section figures "sub-clause (ii) of clause (4)" shall be substituted6 substiti!- 62 for saction 7 of the w e a lth -ta x  act the following seciion shall tion of substituted namelv: —new s e ; tion for section 7value of '7  (j) subject to the provisions of sub-section (2), the value 3 5  •of any asset, other than cash, for the purposes of this act shall be deter-^ its value as on the valuation date determined in the manner laid down in schedule iii-,(2) the value of a house belonging to the assessee and exclusive­ly used by him for residential purposes throughout the period 40 of twelve months immediately preceding the valuation date, mayat the option of the assessee, be taken to be the value determined in the manner laid down in schedule iii as on the valuation date next following the date on which he became the owner of the house or the valuation date relevant to the assessment year commencing on the 1st day of a-pril, 1971, whichever valuation date is later;provided that where more than one house belonging to the assessee is exclusive]|y used by him for residential purposes, the provisions of this sub-section shall apply only in respect of one of such houses which the assessee may, at his option, specify in this behalf in the return of net wealth , explanation—^for the purposes of this sub-section,—(i) where the house has been constructed by the asseasee, he shall be deemed to have become the owner thereof on the date on which the construction of such house was completed;10(ii) "house" includes a part of a house being an independent residential unit'amendmeptof section11•4 of 1988 s3  in section 11 of the wealth-tax act [as substituted by section 131of the direct tax laws (amendment) act, 1987], in sub-section (2), in clause (b), for the brackets and figure " (5)", the brackets and figure15 " (4) " shall be substituted and shall be deemed to have been substituted with effect from the 1st day of april, 19884 of 198864 in section 16 of the wealth-tax act [as substituted by section 138 amendof the direct tax laws (amendment) act, 1987]— mentofsection 1620(a) in sub-section (d, in clause (a), after the proviso, following proviso shall be inserted, namely; —the"provided further that an intimation for any tax or interest due under this clause shall not be sent after the expiry of two years from the end of the assessment year in which the net wealth was first assessable";25(b) after sub-section (j) the following sub-section shall be inserted, namely: —" (la) (a) where in the case of any person, the net wealth, as a result of the adjustments made under the proviso to clause(a) of sub-section (1), exceeds the net wealth declared in the 3 0  return by any amount, the assessing officer shall,—35(i) further increase the amount of tax payable under sub-section (1) by an additional wealth-tax calculated at the rate of twenty per cent, of the tax payable on such excess amofunt and specify the additional wealth-tax in tbs intimation to be sent under sub-clause (i) of clause (a) of sub-section (i);(ii) where any refund is due under sub-section (1), reduce the amount of such refund by an amount equivalent to the additional wealth-tax calculated under sub-clause (i)-40 (b) where as a result of an (jrder under section 23 or section 24 or section 25 or section 27 or section 29 or section 35, the amount on which additional wealth-tax is payable under clause (a) has been increased or reduced, as the case may be the additional wealth-tax shall be increased or reduced accordingly, and,—(i) in a case where the additional wealth-tax is increas­ed, the assessing officer shall serve on the assessee a notice of d«nand under section 30; 5(ii) in a case where additional wealth-tax is reduced, the excess amount paid, if any, shall be refundedexplanation—^for the purposes of this sub-section, "tax payable on such excess amount" means the difference between the tax on the net wealth and the tax that would have been 1 0  chargeable had such net wealth been reduced by the amount of adjustments''ainendm eot of section16a,65 in section 16a of the wealth-tax act, in sub-section (1), in the opening portion, after the words "under this act", the words and figures "where under the provisions of section 7 read with the rules made undac 15 this act or, as the case may be, the rules in schedule iii, the market value of any asset is to be taken into, account in such assessment," shall be inserted8 6 , in section 17 of the wealth-tax act, in sub-section (i) [as substitut­ed by clause (a) of section 139 of the direct tax laws (amendment) 2 0  4 1988act 1987],—amendment of eectioji 17 for reasons to be recorded by him in writ- the words "has reason to believe" shall                                          be    (a) for the words ing is of the opinion", substituted:     (b)                 after the proviso, the following proviso shall be inserted, 2 5  namely: —    "provided further that the assessing officer shall,                                                           beforeissuing any notice under this :rab-section, record his reasons fordoing so''4 of 1988    67           in section 17b of the wealth-tax act [as inserted by section 141 jqof the direct tax laws (amendment) act, 1987],—amendment of section 17b(a) in sub-section (1 ),—    (i) after the words "net wealth as determined" tue words,brackets and figures "under sub-section                                          (1 ) of section                                                         16 or" shall be inserted;                                                                3 5     (ii) for explanation 2, the following explanation shall                                                                         besubstituted, namely:—                                                                                 'explanation 2—in this sub-section, "tax payable on the net wealth as determined imder sub-section (1 ) of section 16" shall not include the additional wealth-tax, if any, pay- 4 q able under section 16';      (iii) after explanation 3, the following                                                                        explanation                                                                                             shall be inserted, namely: —   'exploration 4— in this sub-section, "tax payable on the net wealth as determined under                                   sub-section (1) of section 4 516 or on regular assessment" shall, for the purposes of computing the interest payable under section 15b, be deem­ed to be tax payable on the net wealth as declared in the return-';5 (b) in sub-section (3),—(i) after the words, brackets'and figures "sub-section (1) of section 17 issued", the words, brackets and figures "after the determination of net wealth under sub-section (1) of section 16 or" shall be inserted;10 (m) after the words "net wealth as determined", the words,brackets and figures "under sub-section (1) of section 16 or" shall be inserted;(in) the eocplanation shall be omitted68 in section 18 of the wealth-tax act [as it stood immediately before15 its substitution by section 142 of the direct tax laws (amendment)4 041988 act, 19^7],—amendment of section 18(a) in sub-section (2),—(i) clause (a) shall be omitted;(ii) clause (i) shall be omitted;20(hi) for clause (ii), the following clause shall be substituted, namely:—25" (ii) in the cases referred to in clause (b), in addition to the amoimt of wealth-tax payable by him, a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees for each such failure;";(iv) for the proviso, the following proviso shall tirted, namely:—be substi-3"provided that in the cases referred to in clause (/>), no penalty shall be imposable if the person p>oves that there was a reasonable cause for the failure referred to in that clause";(v) for explanation 3, the following explanation shall substituted, namely: —be354045"explanation 3—where any person who has not pre­viously been assessed under this act, fails, without reason­able cause, to furnish within the period specified in sub­section (1) of sectiofi 17a, a return of his net wealth which he is required to furnish under section 14 in respect of any assessment year commencing on or after the 1st day of april, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section(4) of section 16 or sub-section (1) of section 17 and the assessing officer or the deputy commissioner (appeals) or the commissioner (appeals) is satisfied that in respect of such assessment year such person has assessable net wealth, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or debts in respect of such assessment year, notwith­standing that such person furnishes a return of his net s wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice under section 17'';(t'i) after explanatioj 5, the following explanation shall be inserted, nam ely:— 1 0"explanation 6 —^where any adjustment is made in the wealth declared in the return xmder the proviso to clause(a) of sub-section (1) of section 16 and additional v'calth- tax charged under that section, the provisions of this sub­ section shall not apply in relation to the adjustments so 1 5  made";(b) for sub-section (3), the following sub-section shall be ■ubstituted namely: —" (3) no order imposing a penalty under sub-section (1) shall be made— 2 0(i) by the income-tax officer, where the penalty exceeds ten thousand rupees;(ti) by the assistant commissioner^ where the penalty exceeds twenty thousand rupeesexcept with the prior approval of the deputy commissioner"; 25(c) sub-section (3a) shall be omitted; (d) for sub-section (5) the following sub-sections shall be substituted, namely: —" (5) no order imposing a penalty under this section shall be passed— 30(i) in a case where the assessment to which the pro­ceedings for imposition of penalty relate is the subjectmatter of an appeal to the deputy c''mmissioner (appeals) or the commissioner (appeals) under section 23 or an appeal tc» the appellate tribunal under sub-section (2) of section 24, 3 5 after the expiry of the financial year in which the proceedingsin the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the deputy commissioner (appeals) or the commissioner (appeals) or as the case 4^ may be, the appellate tribunal is received by the chief com­missioner or commissioner, whichever is later;(ii) in a case where the relevant assessment is the subject-matter of revision under sub-section (2) of section25, after the expfry of six months from the end of the month in which such order of revision is passed;(hi) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are com­pleted, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later«explanation—in computing the period of limitation for the purposes of this section,—(i) any period during which the immunity granted under section 22h remained in force;10(ii) the time taken in gi\dng an opportunity to the assessee to be reheard under the proviso to section 39; and(iii) any period during which a proceeding under this section the levy of penalty is stayed by an order or injunction of any court,15shall be excluded20(6) the provisions of this section as they stood immediately before their amendment by the direct tax laws (amendment) act, 1988 shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of april, 198s, or any earlier assessment year and references in this section to the other provisions of this act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment vear"2589 for section 18a of the wealth-tax act [as it stood immediately before its substitution by section 142 of the direct tax laws (amend­ment) act, 1987], the following section shall be substituted, namely' —substitu­tion of now section for section 18a'18a xi) if any person,—30(a) being legally bound to state the truth of any matter tcmching the subject of his assessment, refuses to answer any question put to him by a wealth-tax authority in the exercise of his powers under this act; or- (b) refuses to sign any statement made by him in the course of any proceedings under this act which a wealth-tax authority may legally require him to sign; orpenalty for failure to answer questions, sign state­ments, furnish iaformation, allow inspec­tion, etc35(c) to whom a summons is issued under sub-section (1) of section 37 either to attend to give evidence or-produce books of account or other docvunents at a certain place and time, omits to attend or produce the books of account or documents at the place and time,40he shall pay, by way of penalty, a s-am which shall not be-less than five hundred rupees but which may axtend to ten thousand rupees for each such default or failure;provided that no penalty shall be imposable under clause (c) if the person proves that there was reasonable cause for the said failure(2) if a person fails to furnish in due time any statement or information which such person is bound to furnish to the assessing officer under section 38, he shall pay, by way of penalty, a sum which 5shall not be less than one h'undred rupees but which may extend to two hundred rupees for every day during which the failure continues:provided that no penalty shall be imposable under this sub­section if the person proves that ther^w as reasonable cause for the said failure 1 0(3) any penalty imposable under sub-section (1) or sub-section(2 ) shall be imposed—(a) in a case where the contravention, failure or default in respect cf which such penalty is imposable occurs in the course of any proceeding before a wealth-tax authority not lower in rank 15 than a deputy director or a deputy commissioner, by such wealth-tax authority;(b) in any other case; by the deputy director or the deputy' commissioner ,(•!?) no order under this section shall be passed by any wealth- 2 0  authority referred to in s'ab-section (3) unless the person on whom tl'e penalty is proposed to be imposed has been heard, or has been given a reasonable opportunity of being heard in the matter, by such authorityexplanation—in this section, "wpalth-tax authority" includes a 2 5  director general director, deputy director, assistant director and a valuation officer while exercising the powers vested in a court under the code of civil procedure, 1908, when trying a suit in respect g of the matters specified in sub-section (i) of section 37' 70 in section 18b of the wealth-tax act,—30(a) in sub-section (i),—airif-nd-tfitnt of cection 18b•(:) claase (i) shall be omitted;(ii) clause (a) shall be omitted;sub-section              shall be    (b) after sub-'^ection (5), the followinginrertsd, namely;— 35      " (6 ) the provisions of this section as they stood immediate­ly before their amendment by the direct tax laws                                                                                    (amend­ment) act, 1988, shall apply to and in relation to                                                                                any assess­ment for the assessment year                                                 commencing                                                                      on the 1 st day of april, 1988, or any earlier assessment year, and references                                                                                              in 4 9  this section to the other provisions of this act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year"    71               in section 23 of the wealth-tax act [as amended by section 146 of the direct tax laws (amendment) act, 1987],—                                                                                                     4 5  4 of ]988amend- m e n l o fejection23,      (i)                   in sub-section                                            (1), in                                                         clause (d), the                                                                                   words,                                                                                               figures and letters "as it stood immediately before the 1st day of april, 1989 or' under section 18 as amended by the direct tax laws (amendment)4 of 1988 act 1987" occurring at the end shall be omitted;v 0 0  in sub-section (la), for clause (b), the following clauseshall be substituted, namely: —i5  " (b) objecting to any penalty imposed under sub-section (1 )of section 18 with the previous approval of the deputy commis­ sioner as specified in sub-section (3) of that section;"72 in section 26 of the wealth-tax act, in sub-section (j), after the am:ndword and figures "section 25", the wo-ds, figures and letter "or an order mant of jo passed by the director general or director under section 18a" shall be section inserted -j73 in section 34a of the wealth-tax act,—a mend-f 1988men i ofsection3-1a15(a) in sub-section (1 ), in the proviso [as inserted by clause (i) of section 150 of the direct tax laws (amendment) act, 1987], in clause (b), for the words "total income", the words "net wealth" shall be substituted;4of 1988tb) in sub-section (4b) [as inserted by section '150 of the direct tax laws (amendment) act, 1987],—20(i) in clatise (a), for the words "where, in pursuance of any order passed under this act, the refund of any amount becomes due to the assessee", the w'ords "where refund of any amount becomes due to the assessee under this act," shall be substituted;25(ii) in clause (c), after the words "an order under", tlie words, brackets and figures "sub-section (3) of section 16 or" shall be inserted4 of 1988 74 in section 35 of the wealth-tax act [as amended by section 160 of the direct tax laws (amendment) act, 1987], in sub-section (3), in clause (c), the words, figures and letter "or section 23a" shall be omitteda m en d ­m en t of section35k3075 after section 35-0 of the wealth-tax act, the following section shall be inserted, namely: —insertion of n ew  section3635p roof of eutrics in records or docu­m ents40"36 entries in the records or other documents in the custody of a wealth-tax authority shall be admitted in evidence in any proceed­ings for the prosecution of any person for an offence under this act, and all such entries may be proved either by the production of the records or other documents in the custody of the wealth-tax authority containing such entries or by the production of a copy of the entries certified by the wealth-tax authority having custody of the records or other documents imder its signature and stating that it is a true copy of the original entries and that such original entries are con­tained in the records or other documents in its custody"76 in section 41 of the wealth-ta?: act, in sub-section (2), for the a m en d - words "and in the case of any other association of persons", the words "and in the case of a company or any other association of persons'' shall 4 5  be subsututed77, in section 42a of the wealth-tax act, the following explanafiofi shall be inserted at the end, namely:—amend­ment of section 42a    "explanation—^in                       the case of a                                       company, the names                                                             of the directors, secretaries and treasurers, or                                         managers of the companji^ may also be published if, in the opinion of the central government, 5 the circumstances of the case justify it"  78 in the wealth-tax act, after schedule ii, the following schedule shall be inserted, namely: —insertion of new sche­dule iii, schedule hi[see section 7(1)] 10 r ules tor determ ining the value of assets p a r t a general1  the value of any asset, other than cash, for the purposes of thi» act shall be determined in the manner laid down in these rules 1 5value of assets how in be deter- ttincd2 in this schedule, unless the context otherwise requires,—defini­tion(1) "accounting year ' in relation to a company means a period in respect of which any profit and loss account of the company laid before it in the annual general meeting is made up;(2 ) "debenture" includes debenture stock, bonds and any other 2 0  securities of a company, whether constituting a charge on the assets of-the company or not;(3) "equity share'' means any share in the share capital of a company other than a preference share(4) ''gold ' means gold, including its alloy, whether virgin, 25 melted, remeltcd, wrought or unwrought, in any shape or form of a purity of not less than nine carats and includes any gold coin (whether legal lender or not) any gold ornament and other article of gold;(5) "gold ornament" means any article in a finished form, meant for personal adornment or for the adornment of any idol, deity or 3 0  any other object of religious v/orship, made of, or manufactured from gold, whether or not set with stones or gems, real or artificial, or with pearls, real, cultured or imitation, or with all or any of them and includes parts, pendants or broken pieces of gold ornaments;(6 ) "investment company" means a company whose gross total 3 5  income consists mainly of income which is chargeable to income-tax under the heads "income from house property'', "capital gains" and "income from other sources"expumation in tiiis clause, the expression "gross total income' shall have the meaning assigned to it in section sob of the income-tax ^  act;(7) "jewellery'' includes—(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-5  precious stones, and whether or not worked or sewn into anywearing apparel;(b) precious or semi-precious stones, whether or not set in any furniture, utensils or other article or worked or sewn into any apparel;1 "preference share" has the meaning assigned to it in section,1 0 1 195« 85 of the companies act, 1956;(9) "quoted share" or "quoted debenture ', in relation to an equity share or a preference share or, as the case may be, a debenture, means a share or debenture quoted on any recognised stock exchange15 with regularity from time to time, where the quotations of such shares or debentures are based on current transactions made in the ordinary  course of businessexplanation—^where any question arises whether a share or debenture is a "quoted share" or a "quoted debenture'' within the 2 0  meaning of this clause, a certificate to that effect furnished by theconcerned stock exchange in the prescribed form shall be acceptedas conclusive;(10) "recognised stock exchange" has the meaning assigned to it in clause (f) of section 2 of the securities contracts (regulation)42 of 25 act, 1956;1956(ii) "unquoted share'' or "unquoted debenture", in relation to an equity share or a preference share or, as the case may be, a deben­ ture, means a share or debenture which is not a quoted share or a quoted debenture 30 p art b immovahle property3 subject to the provisions of rules 4 5, 6, 7 and 8, for the purposes valuaof sub-section (1) of section 7, the value of any immovable property, tioaof being & building or land appurtenant thereto, or part thereof, shall be the 3 5  amount arrived at by multiplying the net maintainable rent by the figure p^jfy 125; ' 'provided that in relation to any such property which is constructed on leasehold land, this rule shall havt effect as if for the figure 125,—(a) where the unexpired period of the lease of such land is fifty 4 9  years or more, the figure 1 0  0 had been substituted; and(b) where the unexpired period of the lease of such land is less than fifty years, the figure 8  0  had been substituted:provided further that where such property is acquired or construction of whidi is com p leted, after the 31st day of march, 1974, if the value so arrived at is lower thaa the cost of ecquisition or the cost of construction, as increased, in either case, by the cost of any improvement to the property, the cost of acquisition or, as the case may be, the cost of construction, as so increased, shall be taken to be the vai'ae of the property under this rule- 54 for the purposes of rule 3, "net maintainable rent" in relation to an immovable property referred to in that rule, shall be the amount of gross maintainable rent as reduced b y ^net nutintainablc rent how to be computed(i) the amount of taxes levied by an(y local authority in resp>fect of the property; and 1 0( i) a sum equ^ to fifteen per cent, of the gross maintainable rent ; ;6  for the purposes of rule 4, "gross maintainable rent", in relation to any immovable property referred to in rule 3 , means—grossluaint£inablarenthow tobe computed    (i) where the property' is let, the amount received or receiv- 1 5  able by the owner as annual rent or the annual value assessed by the local authority in v/hose area the property is situated for the purposes of levy of property ta:c or any other tax on the basis of such assessment, whichever is higher;    (ii) where the property is not let, the amount of annual rent 2 0  assessed by the local authority in whose                                           area                                                  the                                                       property                                                                 is situated for the purpose of levy of property tax or any other tax on the basis of such assessment, or, if there is no such assessment or the property is situated outside the area of any local authority the amount which the owner can reaonably be expected to receive 2 5  as annual rent had such property been letexplanation—in this rule,—( 1 ) "annual rent" means,—      (a) where the property is let throughout the year ending on the valuation date (hereinafter referred                                              to                                                  as                                                      "previous 3 0    year"), the actual rent                          received or receivable by the owner in  respect of such year;                         i                                               •     (b) where the property is let for only a part of the pre­vious year, the amount which bears the same proportion to the amount of actual rent received or receivable by the owner for 3 5  the period for which the property is let as the period of twelve m ont^  bears to the number of months (including part                                                                      of                                                                           a 'month) during wlich the property is let during the previous year:    provided that in the followinj cases, such                                                  actual rent                                                                 under 4 0  sub-clauses (a) and (b) shall be increased in the manner specified below;—                                                 t    (i) where the property is in the occupation of a tenant                                                                andtaxes levied by any local authority                                       in respect of the propertyare borne wholly or partly by the tenant, by the amount of the 45 taxes so borne by the tenant;(ii) w h e re  th e  p ro p e rty  is in th e occupation of a te n a n t and ex p en d itu re o n  rep airs in respect of th e  p ro p erty  is borne b y  th e  te n a n t, b y  o n e-ninth of the actu al re n t;(ii/) w h e re  th e  o w n er h as -accepted a n y  am o u n t as deposit 5 (n o t b ein g  ad v an ce p ay m en t tow ards re n t fo r a p eriod ol th reem o n th s o r le ss), b y  th e  am o u n t calcu lated  a t th e  ra te  of 15 per cent, p e r a n n u m  on  th e  am o u n t of d eposit o u tstan d in g  from  m o n th  to  m o n th , fo r th e  n u m b er o f m onths (excluding p a r t'o f  a m o n th ) d u rin g  w hich su ch  deposit v/as h eld by th e  o w n er in ]0 th e  p rev io u s y ear, a n d  th e  ow n er is liab le to p ay  in te re st onsuch deposit, th e  in crease to be m ade u n d er th is clause sh all be lim ite d  to  th e  sum  b y  w h ich  th e am ount calculated as afore­ said  exceeds th e  in te re st actu ally  paid;, (it?) w h e re  th e  o w n er h as received any am o u n t by w ay ofp rem iu m  o r o th e rw ise  as consideration fo r leasing of th e p ro ­p e rty  o r a n y  m odification o f th e  term s o f th e  leas-?, by th e a m o u n t o btained b y  d iv id in g  th e  p rem iu m  or o th er am o u n t by th e  n u m b e r of y e a rs o f th e  p eriod of th e  lease;(v) w h e re  th e  o w n er d erives an y  benefit o r perquisite, 70 w h etjjer co n v ertib le in to  m oney o r not, as consideration fo rleasin g  of th e  p ro p e rty  o r an y  m odification of th e  term s of the lease, b y  th e  v a lu e  of sucli benefit or p erquisite;(2) "re n t received o r receivable" sh all include all p aym ents for th e  use of th e  p ro p erty , by w h a te v e r n am e called, th e  value of all 25 benefits o r p e rq u isite s w h e th e r convtartible in to  m oney o r not, o b tain ed  fro m  a  te n a n t or occupier of th e p ro p e rty  and any sum  p a id  by  a te n a n t o r occupier of th e  p ro p e rty  in  respect of a n y  obli­gatio n  w hich, b u t fo r such pajt nent, v/ould h av e been p ayable by th e  ow ner i306 w h ere th e  im b u ilt area of th e  plot of land on w hich th e p ro p erty  a d iiistriiferred  to in  ru le  3 is co n stru cted  cxceer's th e  specified area, th e  value m e n tstoarriv ed  a t in accordance w ith  th e provisions of ru le  3 shall b e increased b y  an am o u n t calcu lated  in  th e  follow ing m anner, n am e ly :— at under(a) w h ere th e  difference b etw een th e u n b u ilt a re a  and th e35 specified area exceeds te n  psi' cent, b u t d o ts not exceed fifteen p e rcent, of th e  ag g reg ate area, by an jm o u n t equal to tw en ty  p e r cent area ofo f such v alue; i plotof land(b) w h e re  th e  difference b etw een th e  u n b u ilt area rnd the specified area exceeds ten  p e r cen t b u t does n o t exceed fifteen p er4q cent, of th e  aggregate area by  an nm oim t equal to th irtj- p er cert,of such valu e;            (c) w h ere th e difference betw een th e u n b u ilt area                                                                          and                                                                                th e       specified a re a  exceeds fifteen p e r cent, b u t does not exceed tw en ty         p er cent, of th e  ag g reg ate area by an am o u n t equal to fo rty  p er cent        of such value                                                           i                                                              i45      e x n ln iia tio n — f o r th e purposes of this ru le and ru le 6,—     (a)                 "aggi'e sa te  a re a ", in relatio n  to the plo t of land on w hich th e  p ro p erty  is constructed, me^ns th e  aggrefrate of the area                                                                                       on w it'ch th e p ro p e rty  is constructed end t>'e u n b u ilt area;(b ) "specified a re a ", in  re la tio n  to th e  p lo t o f lan d  on w liich th e  p ro p e rtj' is co n stru cted , m e a n s—(i) w h ere th e  p ro p e rty  is situ a te  a t b om bay, c a lc u tta , d elhi o r  m adras, six ty  p e r cent- of th e  a g g reg ate are a ;      (tj) w h e re  th e  p ro p e rty  is s itu a te  a t a g ra,                                                                        a h m ed ab ad , 5 a llah ab ad , a m ritsa r b an g alo re, b hopal,                                                            cochifli,                                                                         h y d erab ad , in d o re, jabalpui ja m sh e d p u r,                                              k a n p u r,                                                           l u ck n o w ,                                                                           l u d h ia n a  m ad u rai, n ag p u r p a tn a , p u n e , s alem , s h o lap u r, s rin a g a r, s u ra t, t iru c h ira p p a lli t riv a n d ru m ,                                           v ad o d ara                                                          (b aro d a)                                                                        or v aran asi (b a n a ra s), sixty-f?ve p e r cen t, of th e  a g g reg ate a re a ; an d                                                                                          10      (iii)                    w h e re  th e  p ro j)erty  is situ a te  a t an y  o th e r place, sev en ty  p e r cen t of th e  a g g re g a te  area:                                                      ,     p ro v id e d  th a t w h ere, u n d e r a n y  la w  fo r th e  tim e  b e in g  in force, th e  m in im u m  a re a  o f th e  p lo t o f la n d  re q u ire d  to  b e  k e p t as open space fo r th e  e n jo y m e n t of th e  p ro p e rty  exceeds th e  specified area, 15 su ch  m in im u m  a re a  sh a ll be deem ed  to  b e  th e  specified area;      (c) "im b u ilt a re a '', in  re la tio n  to th e  a g g reg ate a re a  of th e  p lo t o f la n d  o n  w h ich  th e  p ro p e rty  is co n stru cted , m ean s th a t                                                                                      p a rt                                                                                               of such a g g re g a te  a re a  on w h ich  no  b u ild in g  h as b een  erectedadjust­ment for unearned increase in the value of the land   7 w h e re  th e  p ro p e rty  is c o n stru cted  on la n d  o b tain ed  on  itase fro m  20 th e  g o v ern m en t, a io c ei cut"v^^t)ritv o r an v  r^ ith o rity  re fe rre d  to  in  clause (20a> of section 10 of th e  in co m e-tax  a ct, a n d  th e  g o v ern m en t o r an y  su ch  a u th o rity  is u n d e r th e  term s of th e  lease, e n title d  to                                                                         claim                                                                                   an d  reco v er a specified p a rt o f th e  u n e a rn e d  in crease in th e  v a lu e  of th e  la n d  a t th e  tim e  o f th e  tra n sfe r o f th e  p ro p e rty , th e  v a lu e  of such p ro p e rty  as d e te m in e d  u n d e r ru le  3 sh all b e  red u ced  b y  t h e  am o u n t so lia b le  to b e claim ed a n d  reco v ered  o r b y  an  am o u n t e q u a l to fifty p e r cent, o f th e  v alu e of th«» p ro p e rty  as so d e te rm in e d , w h ic h e v e r is less, as if th e  pro- d erty h a d  b een  tra n sfe rre d  on  th e  v a lu a tio n  date                                                              •   er^lnnation—f o r th e  p u rp o se of th is ru le , "u n e a rn e d  in crease" m eans 30 th e  difference b e tw e e n  th e  v a lu e  of such la n d  on th e  v a lu a tio n  d p te as d e te rm in e d  v>v th e  g o v e rn m e n t or such a u th o rity  fo r th e  p u rp o se of cal­cu la tin g  su ch  in crease rn d  th e  am o im t o f th e  o rem iu m  p aid o r p ay ab le to th e  g o v e rn m e n t o r such a u th o ritv  fo r th e  lease o f th e  lan d 8 n o th in g  co n tain ed  in, ru le  3 shall apply,—                                                                      35hule3 not to «pply in certain easm(a) w h ere, h a v in g  re g a rd  to th e  facts an d  circu m stan ces of th e  case, th e  a ssessing oflbcer, w ith  th e  p rev io u s ap p ro v al of th e  d e p u ty  c om m issioner, is of opinion th a t it is n o t p rac tic a b le  to  a p p ly  th e  p ro v isio n s of th e  said  ru le  to  such a case; o r(b ) w h e re  th e  d ifference b etw een  th e  u n b u ilt a re a  an d  th e  speci- ^  fied a re a  ex ceed s tw e n ty  p e r cen t, of th e  ag g re g a te  a re a ; o r(c) w h e re  th e  p ro p e rty  is c o n stru cted  on leaseh o ld  la n d  an d  th e  lease e x p ire s w ith in  a  p erio d  n o t ex ceed in g  fifteen y e a rs fro m  th e  re le v a n t v alu atio n  d a te  an d  th e  deed o f lease does n o t give a n  o ption to th e  lessee fo r th e  re n e w a l o f th e  leasea n d  in  a n y  case re fe rre d  to  in  clause (a) or clause (b) or clause (c ), th e  v alu e o f th e  p ro p e rty  sh a ll b e d eterm in ed  in th e  m a n n e r laid dow n in  n ile  20 p art c 5 shares in or debentures oj companies| quoted   |     ||----------|-----|| shares   |     || and de­   |     || bentures |     || of com­   |     || panies  |     |       9 t h e v a lu e  of an eq u ity  sh are o r a p referen ce sh a rt in  a n y  com pany    o r a d e b e n tu re  of a n y  com pany w hich is a quoted sh a re  o r                                                                                    a                                                                                        q u o ted     d e b e n tu re  sh all be ta k e n  as th e  v a lu e  quoted in  respect of such s h a rt o r    d e b e n tu re  on th e  v alu atio n  d a te  o r w h e re  th e rt is ho such q u o tatio n  on10 th e  v alu atio n  d ate, th e  q u o tatio n  on th e d ate closest to th e v alu atio n     d a te  an d  im m ed iately  p reced in g  such date   10 ( i )  s u b ject to th e  p rovisions of sub -ru le (2) ,                                                        th e  v alu e of tm - q u o ted  p referen ce sh a re  in  an y  com pany shall—un­ quotedprefer­enceshares(a) where the preference share is issued before the valuation 15 date at a rate of dividend of not less than eight per cent, be thep aid -u p  v alu e of such sh are; and     (b ) w h e re  th e  p referen ce sh a re  is issued b efore th e  v alu atio n  d ate a t a ra te  of dividend of less th a n  eig h t p e r cent, b e th e                                                                                   ad ju sted  paid -u p  v a lu e  of such share20 (2) w h ere no d iv id en d  h as b een paid in  resp ect of an  unq u o tedp referen ce sh a re  by  a n y  com pany co ntinuously for n o t less th a n  th re e  accountin g  y ears en d in g  on th e  v alu atio n  d ate or, in  a case w h ere th e  acco u n tin g  y ear of th e  com pany does n o t e n d  on th e  v alu atio n  date, fo r n o t less th a n  th re e  continuous accounting y ears en d in g  on a d ate im m e- 25 d iately  b efo re th e  v alu atio n  date, the p aid -u p  v alu e or, as th e  case m ay be, th e  ad ju ste d  p aid -u p  v alu e shall be red u ced -  ,(a) in  th e  case of a non -cu m u lativ e preferen ce share, as indi­cated in th e t able b e lo w :—2 q number of accounting years ending on the valrmtion date or, in a case where the acfcounting year does ^not end on the valuation date, the number of accounting years ending on a date immediately preceding the valuation date, for which no dividend has been paid 'rate of reduction35(i)(2)three years10 per cent, of the paid-uo value or the adjus'ed paidup value, as the case may be :—do— 20 - d o -30four years 40 five years$ix years and above40—do—     (b)                 in  th e  case of a cu m u lativ e                                                         p reference share, by one h alf of th e rates specified in th e  aforesaid tableexplanation—f o r th e  purposes of this rule, "adjusted paid-up v alu e", 45 in  relatio n  to a p referen ce share, m eans an  am ount w hich bears to th e  p aid-up v alu e of th e  p referen ce sh are th e sam e proportion as the stip u la t­ed ra te  of dividend, [b ein g  th e  ra te  of dividend on th e  preference sh are 2000 l s - 7           specified in the terms of issue of such share, and in a case whece such            dividend is required to be increased under the provisions of section 3 of the            reference shares (regulation of dividends) act, 1960, the rate of dividend     ^            as so increased] on such share bears to the rate of eight per centquoted                          value of an unquoted equity share in any company, other 5 in com-                    investmmit company, shall be determined in the manner stt outpanics'            in sub-dule (2)                                                                                   1                     (2)                                                the value of all the liabilities as shown in the balance-sheet invest-                   ®^^h company shall be deducted from the value of all its assets shownment               in that balance sheet; the net amount so arrived at shall be divided by 10              the total amount of its paid-up                                                            equity share capital as shown in the               balance-sheet; the result multiplied by the paid-up value of each equity               share shall be the break-up value of each unquoted equity share, and an                amount equal to eigh ty per cent of the break-up value so determined                shall be the value of toe unquoted equity share for the purposes of this                a ct(3) for the purposes of sub-rule (2),—    (a) the following amounts shown as assets in the balance-sheet shall not be treated as assets, namely: —        (i) any amount paid as advance-tax under the income-tax   act:        (ii) any amount shown in the                                         balance-sheet including the    debit balance of the profit and loss account or the profit and loss     af^ropriation accoimt which does not represent the value of any     asset;                                                                    25    (b) the following amounts shown as liabilities in the balance- sheet shall not be treated as liabilities, namely: —        (t) the paid-up capital in respect of equity shares;    (ii) the amoimt set apart for pajonent of dividends oa preference shares and equity shares where such dividends have not been declared before the valuation date at a general body meeting of the company;    (iii) reserves, by whatever                                name called, other than those set apart towards depreciation;    (iw) credit balance of the profit and loss account;    (v) any amount representing provision for taxation, other than the amount referred to in sub-clause (i) of clause (a), to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto;(tn) any amount representing contingent liabilities other than arrears of dividends payable in respect of ciunulative pre­ference shares   etplanation— for the purposes of this rule,                                                  "balance-sheet",                                                                   in relation to any company, means the                                      balance-sheet of such                                                             company (including the notes annexed'thereto and forming part of the accounts) as drawn up on the valuation date and, where there is no such balance- sheet, the balance-sheet drawn up on a date immediately preceding the valuation date, and, in the absence of both, the balance-she^t drawn up on a date immediately after the valuation date12 (1) subject to rule 13, the value of an unquoted equity share in an investment company shall be determined in the manner specified in sub-rule (2)| u n      |     ||-----------|-----|| quoted    |     || equity    |     || shares    |     || in invest­ |     || m ent     |     || com­       |     || panies   |     |(2) the value of all the liabilities as shown in the balance-sheet of 5 such company shall be deducted from the value of all its assets shown in that balance-sheet; the net amovmt so arrived at shall be divided by the total paid-up equity share capital of the company as shown in the balanceslieet, and the result multiplied by the paid-up value of such equity share shall be the value of the unquoted equity share in that investment com- 10 pany for the purposes of this act(3) for the purposes of sub-rule (2), the value of an asset disclosed in the balance-sheet of the company shall be taken to be its value deter­ mined in accordance with the rules as applicable to that particular asset and, in the absence of any such rule, the value of such asset shall be its15 value as determined under rule 20(4) for the puiposes of this rule,—(a) "balance-sheet" has the same meaning as in rule 11;     (h)                  the amounts referred to in sub-rule be treated as assets or liabilities                                                       (3) of rule 11 shall not20 (5) for the purpose of facilitating the valuation of unquoted equityshares under this rule and rule 13, the company concerned shall have such valuation made by its auditors appointed under section 224 of the companies act 1956, and a certificate of the auditors relating to such valuation in the prescribed form shall be furnished to the assessing officer 25 in 'the case of the company; and the valuation made by the auditors shall be taken into account in the assessments of the shareholders of the company13 (i) the value of an unquoted equity share in one of the two interlocked companies held by the other interlocked company for the 30 purposes of rule 12 shall be errual to the paid-up value of such share or the value determined under sub-rule (2), whichever is higherun­quoted equity shares in inter­locked com­panies    (2)               for the purpose of sub-rule (1), the aggregate value of all the equity shares in an interlocked company shall be arrived at by multiplying the maintainable profits of such company by—35    (a) the fraction                        100/85 in a case where the gross total in­come of the company consists, to the extent of not less than 51 per cent, of income chargeable under the head "income from house property"; or    (b) the fraction 100/ 10 in the case of any other interlocked company,4045and the lesiotant amount divided by the number of such equity sh-ires phall bo the value of such an equity share in such company   (3> the maintainable profits of the company, for the purpose of sub­rule (2) shpjl be computed in the following manner namely:—        (a)                 the book profits of the companv for the five arcountins; years     of the companv immediately preceding the valuation date shall     first be agcertained;    (b) adjustments shall                            be                                  made to the book profits                                                                 for eachof the said five years for all non-recurring and extraordinary items of income and expenditure and losses;    (c) adjustments shall be                                 made to the book profits                                                                  for ex­penditure which is not of a revenue nature but is debited in the 5 accounts and for receipts which are in the nature of revenue receipts but are not accounted for in the profit and loss account;    (d) any development rebate or investment allowance debited in the books of account shall be added back to the book profits;    (c> the tax liability                             of                                  the company on the book profits, 10arrived at after the adjustments at items (a), (b), (c) and                                                                   (d), shallbe deducted from such book profits;    (/) amounts required for payin<» dividends on preference share or shares with prior riphts shall be deducted from such book profits;    (p> the aggregate of the book profits for the five account- 15 ing years so arrived at divided by 5, shall be the maintain­able profits of the companyexplanation—^for the purposes of this rule, "interlocked companies" means any two investment conjpanies each of which holds shares in the other company 20 p a r t d assets of business    14            (i) where the assessee is carrving on a business for which accounts are maintained by him regularly, the net value of the assets of the busi­ness as a whole, having regard to the balance-sheet of such business on 25 the valuation date after adjustments sr>ecified in                                                                sub-rule (2) shall be taken as the value of such assets for ihe purposes of this act(2) for the purposes of sub-rule (1) —       (a)                  the                           value of any asset as disclosed in the balancc-s^eet  shall be taken to be—                                     '      in the case of an asset on which depreciation is admissible, its written-down value;   cth in th? case of r»n asset                               on which no depreciation is admissible, its book value;   (iti) in the caso of closing stork it<i value adopted for the 35 purposes of assessment vmder the income-tax act for the pre­vious year relevant to the correpnonding assessment year;    (b) whore the value of anv of the asset«i referred to in clause(a), determined in accordance with the nrovisions of this schedule as applicable to that partinilar asset or if there are no such provi- 40 sfons <?etermined in accordanfp with rule 20 exceeds the value arrived at in accordance with claxise fa) bv more than 20 per cent then the higher value shnll be tnl^on to he the value of that asset;    cr) the              value of an as'pt not                                      disrlo5<>ri in the balance-sheet, shall he taven to be fho valnr r'efetnined in accordance with the 45 provisions of this schtdule as applicable to that asset;    (d)             the value of the following assets which are disclosed in the balance-sheet shall not be taken into account namely: —   (i) any amount paid as advance tax under the income-taxact;                       (ii)                                                      the debt due to the assessee according to the balance-                sheet or part thereof which has been                                                                            allowed as a deduction ^               under clause (vii) of sub-section                                                                     (i) of                                                                                   section 36                                                                                                      of the               income-tax act, for the purposes of assessment for the previous                year relevant to the! corresponding assessment year under that                act;(hi) the value of any asset in respect of which wealth-tax 10 is not payable under this act;     (iv)                 any amount shown in the balance-sheet including the debit balance in the profit and loss account or profit and loss appropriation account which does not represent the value of any asset;                                                                                '15 (v) any asset shown in the balance-sheet not really pertain­ing to the business;(e) the following amounts shown as liabilities in the balancesheet shall not he taken into account, namely:—(i) capital employed in the business other than that attri-20 butable to borrowed money;(it) reserves by whatever name called;(itt) any provision made for meeting any future or contin­gent liability;(iv) anv liability shown in the balance-sheet not really 25 pertaining to the business;(r) any debt owed bv the assessee to the extent to which it has been snecifically utilised for acouiring an asset in respectof which wealth-tax is not payable under this act:      provided that where it is not possible to calculate the amount 30 of debt so utilised, it shall be taken as the amount which bears the   same oroportion to the total of the debt? owed by                                                      the assessee as   the value of that asset bears to the total value of the tssets of the business    explanation—provision for any purpose other than taxation shall be treated as a reserve 35 p a rt e interest in firm or association of persdns    15               the value of the interest of a person in a firm of which he is a partner or in an association of persons of which he is a member shall be determined in the manner provided in rule 16| v alua-      |     ||--------------|-----|| tion of      |     || interest     |     || in firm      |     || or assoclji- |     || tion         |     || of           |     || persons     |     |16 the net wealth of the firm or association of persons on the valuation date shall first be determined as if it were the assessee and, thereafter,—(i) that portion of the net wealth of the firm or association as is equal to the amount of its capital shall be allocated among the 5 partners or members in the proportion in which capital has been contribute by them;compu­tation of net wealth of the firm or •sso- ciation and its alloca­tionamongst the part, nersor mem­bers    (ii) the residue of the net wealth jtif the firm or association shall be allocated amongst the partners or members in accordance with the agreement of partnership or association                                                   for the distribution of 10 assets in the event of dissolution of the firm or association or,                                                                         in the absence of such agreement, in the proportion in which the partnersor members are entitled to share the profits,and the sum total of , amounts so allocated to a partner or member under clause (i) and claur« (ii) shall be treated as the value of the interest of 15 that partner or member in the firm or association:    provided that in determining the net wealth of the firm or associa­tion for the purposes of this rule, no account shall be taken of the ex­emptions in sub-sections (i) and (la) of section 5explanation—^for the purposes of this rule,—                                                                  20     (a) where the net wealth/ of the firm or association c o m p u ^  in accordance with this rule includes the value of any assets located outside india, the value of the interest of any partner or member in the assets located in india shall be determined having regard to the proportion which the value of assets located in india diminished by 25 the debts relating to those assets bears to the net wealth of the firm or association;    (b) where the net wealth of the firm or association computed in accordance with this rule induces the value of any assets which are exempt from inclusion in the net wealth under sub-sections (i) 3 0  and (14) of section 5, the value of the interest of a partner or mem­ber shall be deemed to include the value of bin nroportionate sharein the said assets and, the provisions of sub-sections (i) and (la) of section 5 shall apply to him accordingly;    (c) where the net wealth of the firm or association computed 35 in accordance with this rule inclu'les the value of any assets referredto in sub-section (2) of section 5, the value of the interest of a partner or member shall be deemed to include the value of his proportionate share in the said assets, and the                                  provisions                                             of sub-section (2) of section 5 shall apply to him accordingly                                                                  40 p art f life interestn   (i) for the purposes of sub-section (1) of section 7, the value of the life interest of an assessee shall be arrived at by multiplying the average annual income that accrued to tlie assesse<» from the life in­45valua­tion of life interestterest by the fraction ^ minus 1, where 'p' represents the annual premium for a whole life insurance without profits on the life of th^life tenant for unit sum assured as specified in the appendix to these rules, and 'd' is equal to t being the rate of interestexplanation—in this rule,—(o) "life tenant" means a person for the duration of whose life 5 the life interest is to subsist;(b) "average annual income" means the average of the gross income derived by the assessee from the life interest during each year of the period ending on the valuation date, reduced by the average of the expenses incurred on the collection of such income in1 0  each of those years:provided that the amount of the reduction for such expenses shall, in no case, exceed five per cent, of the average of the annual gross income:provided further that in case the income so derived is for a period 15 exceeding three years, only that income derived during the threeyears ending on the valuation date shall be taken into accoiuit;(c) the rate of interest shall be per cent, per annum(2 ) notwithstanding anything contained in sub-rule (1 ),—(o) the assessing officer may, if he is of the opinion that in the2 0  case of the life tenant, a life insurance company would not take therisk of insuring his life at the normal premium rates in force but would demand a higher premium, vary the valuation suitably;(b) the value of the life interest so determined shall, in no case, exceed the value as on the valuation date as determined under this 2 5  schedule, of the corpus of the trust from which the life interest isderived p art g jewellery18 the value of jewellery shall be—valua­tion of jewellery3 0  (a) where the value declared by the assessee in the return ofnet wealth does not exceed rupees five lakhs, and the return issupported by a statement in the prescribed form, the value so de­clared in the return;(b) in any other case^ subject to rule 19, the price which in the 3 5  opinion of the valuation officer, on a reference made to him undersection 16a, the jewellery would fetch if sold in the open market on the valuation date19 the value of any jewellery determined in accordance with clause(b) of rule 18 for any assessment year (hereinafter referred to as the40 first assessment year), shall be taken to be the value of such jewellery for the subsequent four assessment years, subject to the following adjustments, namely: —(a) where the jewellery includes gold or silver or any alloy containing gold or silver, the value of such gold or silver or suchadjust t mentin value o jewellery for sub­sequent assess­ment yearsalloy as on the valuation, date relevant to the concerned subsequent assessment year shall be substituted for the value of such gold or silver or alloy on the valuation date relevant to the first assessment year;(b) where any jewellery or part of jewellery is sold or otherwise disposed of by the assessee or any jewellery or partof jewellery is acquired by him, on or before the valuation date relevant to the concerned subsequent year, the value of the jewellery detenruned for the first assessment year shall be reduced or increased, as the case may be, and the value as so reduced or increased shall be the lovalue of the jewellery for such subsequent assessment year p a r th residuaryvalua­tion of assets ia other20 (j) the value of any asset, other than cash, being an asset which is not covered by rules 3 to 19, for the purposes of this act, shall be 15 estimated to be the price which, in the opinion of the assessing officer, it would fetch if sold in the open market on the valuation date(2) notwithstanding anything contained in sub-rule (1), where the valuation of any asset referred to in that sub-rule is referred by the assessing ofl&cer to the valuation officer imder section 16a, the value 20of such asset shall be estimated to be the price which, in the opinion of the valuation oflbcer, it would fetch if sold in the open market on the valuation date(3) where the value of any asset cannot be estimated under this rule because it is not saleable in the open market, the value shall be 25 determined in accordance with such guidelines or princ^ies as may be specified by the board from time to time by general or special orderrestric­tive covenatsto be ignored in deter-21 for the removal of doubts, it is hereby declared that the price or other consideration for which any property may be acquired by or transferred to any person under the terms of a deed of trust or through 3 0  or vmder any restrictive covenant in any instrument of transfer shall be ignored for the purposes of determining under any provision of this schedule, the price such property would fetch if sold in the open mar­ket on the valuation datemarket valueunit sum assured pp + d  value of life interest of rupee i per aontim at 6 1/2 % rata of interest '00290610100000159011999112001295 12317 3001162 12765 4001095 12893 12951 001065 5 4001058 12965 712955 001063 s001076 12»30 9001(^5 12893 001117 12850 12803 001142 11001169 1212 751 12699 001197 1312644 0•01226 1412587 001257 1512534 001286 t6001319 12473 1712417 0-01350 18001387 12351 1912273 001431 12207 001469 12132 001512 00556 12 057 1311972 001606 001656 11888 11806 001706 11715 001762 11614 001825 11505 001894 11399 001962 11285 002037 11173 002112 11053 0-02194 10927 002281 10804 002369 10675 002462 10541 002562 10400 002669 1024 9 002787 1009300291214100304499320031il9771420 0332s960743 4400347594415003637926745003806909246003987891147004181872448490043878533100046128333500; 04850813051005100792652005362772253540056377518150-05931- 7310550062447,099560065756888570069256 67658590072946464 20007681625560 0081676 00861 0085895806620090255610630094755419 256400993852346501041550540109074879,6667011414470968690-119334543 3001248343807001305442m71013652406272014278390773740149363753; 35015627360275016356345376017125330577 01793731<io71790 187963016800-1970620750012951251700116212,76500109512893001065129510010581256500106312955001076129300010954289300111712850| 001142   |   12803 ||-----------|----------|| 001169   |          || 12 751    |          || 001197   |          || 12699    |          || 001226   |   12644 || 001257   |          || 12587    |          |00128612534001319124730-01350124170013871235100143112273c0146912207001512121320055612 05700160611972001656118880-01706118060017621171500182511614001894115050019621139900203711285002112111730021941105300228110927002369108040024621067500256210541002669104001027871024 900291210093)410030449m2003111977142 430,0332596074400347594414500363792674600390690920039878911470041818724480043878533490046128333500048508130510051007926520053627722530056377518541500s93173105500624470995600657568w5700692566765800729464645920007681625560 0081676 00861 00858958066200902556106300947554196400993852346501041550540109074879666701141447096801193343436930oi24t343807001305442297101365^4062720142783907730149363753743501562736027501635634s3760171253303770179373ico7801879639167940800-197062073 chapfer iv ambndmeim to thb gnt-tax act, 1958ii of 1951amend­ment ofsection z79 in section 3 of the gift-tax act, 1958 (hereafter in this chapter referred to as the gift-tax act), in sub-section (1)^ for the words "the 5 schedule", the word and figure "schedule i" shall ^  substituted1080 in section 5 of the gift-tax act, in sub-section (1), after clause amend- (iiid ), the following clause shall be inserted^ namely:— mentof ^ scctions(the) being an individual who is a non-resident indian, to any relative, of property in the form of the bonds specified under subclaiise (iid) of clause (15) of section 10 cf the income-tax act:provided that the exemption conferred by this clause shall be available only if the gift of such bonds is made after a period of three years from the date of their purchase:isprovided further that where an individual, who is a non-resident indian in any previous year in which the bonds are acquired, becomes a resident in india in any subsequent year, the provisions of this clause shall apply in respect of the gifts of property referred to in this clause in such subsequent year or any year thereafterexplanation—^for the purposes of this clause, the expressions—20 (a^ "relative'' shall have the meaning assigned to it inclause (41) of section 2 of the income-tax act;(b) "non-resident indian" shall have the meaning assign­ed to it in clause (e) of section 1i5c of the income-tax act;'81 for section 6 of the gift-tax act, the following section shall be 2 5  substituted, namely:—substitution of new section for sec­tion 6value of gifts, how de­ termined"6 (i) subject to the provisions of sub-section (2), the value of any property, other than cash, transferred by way of pift shall, for the purpose of this act be its value as on the date on which the gift was made and shall be determined in the manner laid down in 3 0  schedule ii(2) where a person makes a gift which is not rev'ocable for a specified period, the value of the property sifted shall be the caoitalised value of the income from such pro'^erty during the period for which the gift is not revocable"4 of 1988amend­ ment of section 10r2 in section 10 of the gift-tax act fas s'ivctitiited bv section 164 of the direct tax laws (amendment) act 19871, in sub-section (2), in clause (5) for the brackets and " (5v the brackets and fi<njre shall be substituted and shall be deemed to have been substituted with effect from the 1st day of april, 1988- ofiw a83 tn section 15 of the gift-tax act fas substituted by section 170 of the direct tax laws (amendment) act 1987]—amend­ment of section 15(a) in sub-section (1) in clause (a^ after the proviso, the fol­lowing proviso shall be inserted, namely:—"provided further that an intimation for any tax or interest 45 due under this clause shall not be sent after the expiry of two years from the end of the assessment year in which the gifts were first assessable'';(b) after sub-section (i), the following sub-section shall be inserted, namely: —" (la) (0) where in the case of any person, the taxable gift, 5 as a result of the adjustments made under the proviso to clause (a) of sub-section (i), exceeds the taxable gift declared in the return by any amoimt, the assessing officer shall,—    (i) further increase the amount of tax payable imdersub-section (i) by an additional gift-tax calculated at the 12rate of twenty per cent, of the tax payable on such excess amount and specify the additional gift-tax in the intimationto be sent under sub>clause (i) of clause (0) of sub ocction(i);    (ii) where any refund is due under sul)-section (i), re- 15 duce the amount of such refund by an amount equivalent to the additional gift-tax calculated under sub-clause (i)     (b)               w here as a result of an order under section 22 or section 23 or section 24 or section 26 or section 28 or section 34                                                                           the amount on which additional gift-tax is payable under clause 20 (a) has been increased or reduced, as the case may be, the addi­tional gift-tax shall be increased or reduced accordingly, and,—    (t) in a case where the additional gift-tax is increased," the assessing officer shall serve oa the assessee a notic of demand under section 31;                                                                25    (it) in a case where the additional gift-tax is reduced, the excess amount paid, if any, shall be refunded   explanation—for the purposes of                                      this                                            sub-section, "tax p>ayable on such excess amount" means the difference between the tax on the taxable gift and the tax that would have been 30 chargeable had such taxable gift been reduced by the amount of adjustm ents";     (c)                  in sub-section (6), in the opening portion, after the words "under this a ct", the words and figures "whe^'e under the provisions of section 6 read with schedule ii, the fair market value of any 35 property transferred by way of gift is to be taken into account in such assessment," shall be insertedamend-               g4                      section 16 of the gift-tax act, in sub-section (i) [as substi-          tuted by clause (a) of section 171 of the direct tax laws (amendment)is           act, 1987],—                                                                                ^  4 of 1968     (a)                 for the words                                       for reasons to be reconjed by him in writing, is of the opinion", the words tias reasons to believe" shall be sub­stituted;                                                                     i(b) after the proviso, the following proviso shall be inserted, nam ely:—"provided further that the assessing officer shall, before issuing any notice under this sub-section, record his reasons for 5 doing so "85 in section 16b of the gift-tax act [as inserted by section 173 of amendthe direct tax laws (amendment) act, 1987],— mentof section(a) in sub-section (i),— 16b(i) after the words "taxable gifts as detennined'', the words, jq brackets and figures "under sub-section (i) of section 15 or"shall be inserted;(ii) for explanation 1, the following explanation shall be substituted, namely: —'explanation 1—in this sub-section, "tax payable on the1 5  taxable gifts ^  determined under sub-section (i) of section15" shall not include the additional gift-tax, if any, payable imder section 15';(iii) after explanation 2, the following explanation shall be inserted, namely: —20 'explanation 3—^in this sub-section, "tax payable onthe taxable gifts as determined under sub-section (i> of secti(m 15 or on regular assessment" shall, for the purposes of computing the interest payable under section 14b be deem­ ed to be tax payable on the taxable gifts as declared in the2 5  return';(b) in sub-section (3),—(i) after the words, brackets and figures "under sub-section (i) of section 16 issued", the words, brackets and figures "after the determination of taxable gifts under sub-section (i) of sec- tion 15 or" shall be inserted;30(ii) after the words "taxable gifts as determined", the words, brackets and figures "under sub-section (1) of section 15 or" shall be inserted;(iii) the explanation shall be omitted86 in section 17 of the gift-tax act [as it stood immediately before amendits substitution by section 174 of the direct tax laws (amendment)act, l£f87],— 1 7(c) in sub-section (1),—(i) clause (o) shall be omitted;(ti) clause (?) shall be omitted;(fii) for clause (ii), the following clause shall be substitutednamely: —" (ii) in the cases referred to in clause (b), in addition to the amount of gift-tax payable by him, a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees for each such ftiilure;";(it)) for the proviso, the following proviso shall be substitu­ted, namely: —"provided that in the cases referred to in clause (b), no 5 penalty shall be imposable if the person proves that there was a reasonable cause for the failure referred to in that clause";(v) the following explanation shall be inserted at the end, namely:— 1 0"explanation—^where any adjustment is made in the taxable gifts declared in the return under the proviso to daum(a) of sub-section (i) of section 15 and additional gift-tax charged under that section, the provisions of this sub-section shall not apply in relation to the adjustments so made"; 15(b) for sub-section (3), the following sub-section shall be sub­stituted, namely; —" (3) no order imposing a penalty imder sub-section (2) shall be made,—(i) by the income-tax ofbcer, where the penalty ex- 20 ceeds ten thousand rupees;(ii) by the assistant commissioner, where the penalty exceeds twenty thousand rupees, except with the prior approval of the deputy commissioner";(c) after sub-section (4), the following sub-sections shall be in- 25 serted, namely: —" (5) no order imposing a penalty under this section shall be passed—(i) in a case where the assessment to which the pro­ceedings for imposition of penalty relate is the subject-mat- 3 0 ter of an appeal to the deputy commissioner (appeals) or commissioner (appeals) vinder section 22 or an appeal to the appellate tribunal imder sub-section (2) of section 23, after the expiry of the financial year in which the proceed­ings, in the course of which action for the imposition of 3 5  penalty has been initiated, are completed, or six months from the end of the month in which the order of the dejmty commissioner (appeals) or the commissioner (appeals) or, as the case may be, the appellate tribunal is received by the chief commissioner or commissioner, whichever is ^  later;(it) in a case where the relevant assessment ia the sub« ject-matter of revision under sub-section (2) of section 24, after the expiry of six months from the end of the month in which such order of revision is passed;(in) in any other case, after the expiry of the finandal year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are com­pleted, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires laterexplanation— ^in computing the period of liiritation for the purposes of this section,—(i) the time taken in giving an opportunity to the assessee to be reheard under ihe proviso to section 38; and10(ii) any period during which a proceeding imder this section for the levy of penalty is stayed by an order or in­junction of any court shall be excluded13ac(6) the provisions of this section as they stood immediately before their amendment by the direct tax laws (amendment) act, 1988 shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of april, 1988, or any earlier assessment year and references in this section to the other provisions of this act shall be construed as references to those provisions as for the time being in force and applicable to the rdevant assessment year"substittu87 for section 17a of the gift-tax act [as it stood immediately be­fore its substitution by section 174 of the direct tax laws (amendment) 25 act, 19®7], the following section shall be substituted, namely:—new ■eeticn for sec­tion 17a'17a (i) if a person,—(a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by a gift-tax authority in the exercise of his powers under this act; or30,(b) refuses to sign any statement made by him in the course of any proceedings under this act, which a gift-tax authority may legally require him to sign; orpenaltyfotfailureto answerguestieni; sign■tate ibei^fijm iftiinform^ tlotl, allow inspec­tion, «t%35(c) to whom a summons is issued under sub-section (1) of section 36, either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce the books of account or docimients at the place and time,40he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure;provided that no penalty shall be imposable under clause (c) if the person proves that there was reasonable cause for the said lidlure    (2) if a person fails to furnish in due time any statement or in­formation which such person is bound to furnish to the assessing qfiker under section 37, he shall pay, by way                                                    of penalty, a sum which shall not be less thzin one hundred rupees                                                      but which may extend to two hundred rupees for every day                                                  during which                                                                   the                                                                        5 failure continues:   provided that no penalty shall be imposable under this sub­section if the person proves that there was reasonable cause for the said failure    (3) any p«ialty                      imposable under                                        sub-gection                                                    (j) or                                                            sub- 10 section (2 ) shall be imposed,—    (a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before a ^ft-tax authority not lower in rank than a deputy director or a deputy commissioner, by such gift- 15 tax authority;    (b) in any other ca^, by the deputy director or the deputy commissioner    (4) no order imder this section shall be passed by any gift-tax authority referred to in sub-section (3) unless the person on whom 20 penalty is proposed to be imposed has been heard or has been givena reasonable opportunity of being heard in the m atter by such stuthority3of 1908   explanation—in this section, "gift-tax                                           authority" includes a director gm eral, director, deputy director, assistant director or 2 valuation officer while exercising the powers vested in a court under the code of civil procedure, 1908, when trying a suit in respect of the m atters specified in sub-section (1) of section 36'amendmentof88 in section 22 of tlie gift-tax act [as amended by section 176 of the direct tax laws (amendment) act, 1987],— 30 4 of igm'    (i) in sub-section (i), in clause                                         (d)^ the words, figures and letters "as it stood immediately before the 1st day of april, 1989 or imder section 17 as amended by the direct tax laws (amendment)act, 1987" occurring at the end shall be omitted;4ofl»88    (ii) in sub-section (la), for clause (c), the following clause shall be substituted, namely: —"(c) objecting to any penalty                                imposed under sub-section                                                             (1)' of section 17 with the previous approval of the deputy com­missioner as specified in sub-section (3) of that section;'' amend­ ment of mctitm 2s89 in section 25 of tlie gift-tax act, in sub-section (1), after the ^  word and figures "section 24", the words, figures and letter "or an <xder passed by the director general or director under section 17a'' shall be insertedm in section 33a of the gift-tax act,—(a) in sub-section (1), in  the proviso (as inserted by dauae (i) 45 of section 180 of the direct tax laws (amendment) act, 1967], in 4 of ink amend mentof wetion stae l a ^  (b), for the words "total income", the words "taxable gifts" shall be substituted;(b) in sub-section (4b), [as inserted by section 180 of the direct tax laws (amendment) act, 1987],—5  (i) in clause (a), for the words "where, in piursuance trfany order passed under this act, the refimd of any amount be­comes due to the assessee", the words "where refund of any aimount becomes due to the assessee under this act," shall be substituted;10 (ii) in clause (c), after the words "an order under", th«words, brackets and figures "sub-section (3) of section 15 or^ shall be inserted51 in section 34 of the gift-tax act [as amended by section 186 of the d ir ^ t a x  laws (amendment) act^ 1987], in sub-section (1), in clatise15 (c) the words, figures and letter "cr section 22a" shall be omittedamend­ment of section ?42 after section 35d of the gift-tax act, the following section shall be inserted, namely:—insertion of new" section 35e20proof of entries in recorda or documenti23"s5e entries in the records or other documents in the custody of a gift-tax authority shau be admitted in evidence in any proceedings for the prosecution of any person for an offence under this act, and all such entries may be proved either by the production of the re­c o r d  fft other documents in the custody of the gift-tax authority conttiining such entries: or by the production of a copy t»f the entries certified by the gift-tax authority having custody of the records or other documents under its signature and stating that it is a true copy of the original entries and that such original entries are contained in the records or other documents in its custody"amend­ment of section 45j3 in section 45 of the gift-tax act, for explanations 1 and 2 [as they stood immediately before their substitution by section 184 of the jq direct tax laws (amendment) act, 1987], the following explanation shall be substituted, namely: —'explanation 1—for the purposes of clause (b), the twrn "amal­gamation" shall have the meaning assigned to it in clause (ib) of section 2 of the income-tax act'35inithioa of new schedulen 5t4 in the gift-tax act, the existing schedule shall be renoimbered as schedxile i and after schedule i as so renumbered, the following sche­dule shall be inserted, namely: —"schedule n   [see section 6(j)]^  rules for determining the value oj property giftedthe value of any property, other than cash, transferred by way at gift riiall, for the purposes of this act, be determined in accordance with the provisions of schedule iii to the wealth-tax act, which shall apply subject to the following modifications, namely: —| value     ||-----------|| gifted    || property, || how to    || be deter, || mined    |in the said schedule,—^  (0) refereneei by whatever form of words t the wealth-taxact shall be construed as rsfsrense to this act;     (b)                 in rule 5, the reference to the year elidhxg on the viomrtion date shall be construed as a reference to the previous year as defined ^  this act;    (e) save as provided in clause (h), references to the valuation date shah be coostrued as r^erences to th e date on                                                             khe gift was                                                                            5made;    (d) reference to section 7 of the w ealth-taz a ct ehall                                                                   catt> strued as references to section 6 of this act;    (e) references to section 16a of the wealtit-tax act shall be construed as references to sub-section (6) of section 15 ol this a c t" , jq chapter v amwdmbnt to tm  direct t ax l aws (am xm ann;) acat, ub795 in the direct tax laws (amendment) act, 19&7,—asm a-(a) in section 3,—1w8 (j) clauses (p) and (s) shall be omitted; u(2) in clause (r), after the yrords "shall ^  sttbatuaited", the words, figures and letters ''and shall j>e -deemed to juore been substituted with effect irom  the 1st day ot apcil u 88" shall be inserted;in section 6, clauses (a), {k) and (1) a a  1m unhmil 20(c) sections 7 and 3 shall be onxitted;(d) in section 9, clause (a) shidl be omitted;(e) in section 10, lor the figures, letters and word 36b, ssc,35cc, 35cca and 35ccb", the figures, letters and word "35b, 35c and 35cc" shall be substituted; ^if) in section 13, clause <ii) shall be omitted;(0) sections 16, 17, 18, 19, 20, 21 24, 26 and 2» diad u  omittea;(h) in section 25, clauses (a), (b), (d) and ainu te « n itte d ;(1) in section 01,—(j) clause (a) shall be omitted,; ^      (2)                   in clause (c), the bradcets,                                                               'flgare -and letter ^fsb) , shall be omitted;     (;) sections 62, 63 66, 67, 68, 69, 71; 72; 100; 101 and 122 shall be omitted;(k) in section 64,—                                                                  ^(1) clause (a) shall be omitted;      (2) in clause (b) the words, brackets                                                                   and figures "sub­sections (2) and (3), and" shall be omitted;(i) in section si, clause (b) «baitt b t(n») section 106 ghall te  omittodi (n) in section, 124—                 (1)                          clauses                                                    (3),                                                             (6),(s ), (9) {10)                                                                                       (11) (13),_                                        ( ^ )  shall be omitted;5 (2) in danse (5), sub-claxise (i) shall be omitted;(^> in  clause (12), for the words "income-tax qfibcer", the words "assessing officer" shali be substituted;(4} in claose (24), tor the words "income-tax officer", tha words "assessing officer" shall be substituted;10 (•) in metkm 126^ dauseg (5), (s), (11), (13), (23) and (2s)shall omitted;(p) sections 142, 143, 144, 147, 174, 175 and 177 shau be omitted;(q> ia ■bctka 149, in clause (a), after the words "shall be iab> stituted", the words, figures and letters "and shall be deemed to 13 have been substituted with effect from the 1st day of april, 1988" sbrll be inserted;(r) in section 160, clauses (1) and (2) shall be omitted;20(s) in section 179, in clause (a), after the words "shall be sub­stituted", the words, figures and letters "and shall be deemed to have been substituted with effect from the 1st day of april, 1988" shau be inserted;(t) in secticm 184, clauses (c) and (d) shall be omitted; (tt) in section 186, clause (2) shall be omitted statfiment of objects and reasons'the direct tax laws (amendment) bill, 1987 introduced and passed by parliament in the winter session of 1987, was preceded by a discus­sion paper on direct tax laws presented to parliament in august, 1986- the proposals iiicorporated in the bui were framed in the light of further discussions and consultations among experts and the public after the presentation of the discussion paper the said bill was passed by both the houses and received the assent of the presidrat on 24th januaijti 1988 and was enacted as act 4 of 19882 after the enactment of the direct tax laws1987, a large number of representations wer6 received from experts, ^ q cem ed  associations chambers of commerce and other tax payers re­garding some provisions in the act the following, in-ter alio, were the main points made in these representations, namely: —(i) the proposed system of assessment of partnership firms is harsh in respect of lower bracket of income, as such firms, subject to certain deductions, will henceforth be taxed at the maximum marginal rate further, the definition of whole-time working partner marginal rate further, the definition of whole-time working partn as introduced by the direct tax laws (amendment) act, 1907 and certain other provisions w ill result in hardship(ii) the levy of additional tax at a flat rate of thirty per cent, would be unfair in cases of gemiine doubts regarding taxability of certain receipts and that the provision relating to levy of additional tax should be made appealable;(iii) the new provisions relating to charitable trusts, voluntary a g n d e s and institution carrying on sdentiflc rmearch, n u y  r—ult in hardship;(iv) the new act has introduced unfettered discretion regarding reopening of assessments3 in response to the representations received, the then finance minister gave an assurance in the lok sabha, while presenting the budget for the financial year 1988-89 (para 94 of part b of the budget speech), that a further amendment bill will be introduced which would take care of genuine grievances pointed out in the representations received he mentioned four areas where amendments relating to the provisions introduced by the direct tax laws (amendment) act, 1987 could be considered these were; —(i) reopening of assessments;(ii) assessment of religious and charitable institutions and trusts as also scientific research associations;(iii) levy of additional tax; and(iv) assessment of the income of the firms and partners4 subsequentlx, during the coune of diccussiqn on th« finance bill, in the lok sabha on 27th april, 1988 and the rajya sabha on 5th may,1988, the finance minister made statements announcing government' decision to give certain tax concessions and incentives iliese, inter alia, relate to reintroduction of investment allowance as an option to the existing investment deposit scheme, complete exemption in respect of export profits by taking these out of the purview of section 115j, exclusion of companies engaged in generation or distribution of electric power from the purview of section 115j, introduction of certain measures for encouragement of tourism for augmenting foreign exchange resources > - j5 after the budget session of 1988, certain tax concessions have also been agreed to for the promotion of the off-shore fund launched by the state bank of india and for the non-repatriable nrl bonds tax con­cessions are also to be given in respect of the technical know-how pro­ vided to certain projects connected with the security of india6 fiarther, amendments in some of the provisions were necessary to set right certain anomalies and also make consequential changes in some of the provisions of the various direct tax laws as amended by the direct tax laws (amendment) act, 1987  amendments are also require to incorporate the rules for valuation of assets in the wealth-tax act so as to provide certainty in the matter of assessment and reducing litigation on this account7 it is, therefore, proposed to amend the income-tax act, 1961, the wealth-tax act, 1957, the gift-tax act, 1958, and the direct tax laws (amendment) act, 1987, to achieve mainly the following objects, namely;—(i) to withdraw the amendments made in the income-tax act for introducing a new scheme of assessment of firms and partners and to restore the old provisions, in this regard;(ii) to withdraw the amendments made in the income-tax act for introducing a new scheme of assessment of charitable or religious trusts, institutions or funds and to restore the old provisions in this regard;(iii) to restore the old provisions of sections 35, 35cca' and 35ccb relating to deductions on account of scientific research, rural development programmes and progi'ammes of conservation of natural resources;(iv) to withdraw the provisions relating to levy of additional income-tax, additional wealth-tax and additional gift-tax and to with­draw the provisions relating to advance ruling in the said act and to restore the old penal provisions in this regard in the said acts 8 the notes on claus«s «xplain in detail the provisions of th« bill9 the bill seeks to achieve the above objectsnw d « ;  -  »mk dacmiber im t cuatse 2 seeks to amend section 2 of the income-tax a ctsub-clause (a) seeks to amend clause (24) of section 2 which relates to tbe definition of the term "income''—(i) by substituting references to clause (21), clause (23) and sub-clauses (iv) and (v) of clause (23c) lor t'ne existing reference to section ^ f ;(ii) by extending the scope of the term "income" to include—(a) any special allowance or benefit specifically granted to the assessee to meet his expenses wholly necessarily and exclu­sively for the performance of his duties; and(b) any allowance granted to the assessee either to meet his personal expenres at the place where he performs his duties or compensate him for the increased cost of living this amend' ment shall be effective and shall be deemed to have been effec­ tive from 1st april, 1962 and will, accordingly, apply in relation to the assessment year 1962-63 and subsequent yearssub-clause (b) se?ks to amend clause (25) defining income-tax officer so as to omit the reference to sub-section (1) of section 117sub-clause (c) seeks to amend clause (37a) [as amended by clause(o) of section 3 of the direct tax laws (amendment) act, 1987] relat­ing to the definition of "rate or rates in force"-■under the proposed amendments, references to,—(a) section 167a in sub-clause (i) of the said clause are being omitted consequent upon the omission of that section relating to charge of tax at the maximum marginal rate in the case of firms;(b) section 194e in suvciause (ii) of the said clause is being omitted with effect from 1-4-1988, consequent upon the retrospective omission of that section relating to deduction of tax at source from interest and salary, etc, paid by a firm to itg partnm clause 3 seeto to amend section 3 of the income-tax act rdating to previous ^eer, as substituted fay section 4 of the direct tax laws (am­endment) act, 1987 under the pro\nsions of sub-section (2) and the proviso theremtdar, it has been provided that in tbe case of an m seuee, who has been having a previous year or years different from the financial jtmt, the previous year r«levant to the assessment year commencing on tke 1st day of apnrfl 19m be iof a period loader th u  twelve under the proposed amendment, second and third provisos are bd&g inserted in sub-section (2) to provide that where a new business or pro­fession is set up, or a source of income newly comes into existence on or after the 1st day of april, 1987, but before the 1st day of april, 1988 and where the accounts in such a case 'lave not been made up to the 31st day of march, 1983, the "previous year" in relation to the assessment year 1989-90 shall be reckoned from the date of setting up of the business or profession or, as the case may be the date on which the source of income newly comes into existence to the 31st day of march, 19^9where the assessee has a'^opted one or more periods previous vear in relation to the assessment year 1988-89 for any source or sources of his income in addition to new business, profession or source of income referred to in the second proviso, the previous year in relation to the assessment year 1989-90 shall be reckoned separately in the manner specified in that sub-section in respect of each such sources of income and the longer or the longest of the periods so reckoned shall be the previous year for the said assessment year clause 4 seeks to amend section 10 of the income-tax actsub-clause (a) seeks to insert a new clause (6c) the new clause provides that income by way of fees for technical services receix'e'^ by such foreign company, as may be notified by the central government, shall not form part of the total income of such company, where such income is received in pursuance of an a^eement entered into with the central government to provide services in or outside india in projects connected with security of india-sub-clause (b) seeks to insert a new sub-clause (iid) in clause (15) "nie new sub-claite provides that interest received by a non-resident indian ftrtm such b^nds as are notified by the central government or by any individual owning the bonds by virtue of being a nominee or sur­vivor of such non-resident indian or by an individual to whom the bonds have been gifted by the non-resident indian, will not be includ­ed in computing the total incwne of such individualthe first proviso to the sub-clause seeks to pro\"de that the bonf^s should have been purch'^sed by a non-resident ind'an in foreign exchange and the interest and principal received in respect of such bonds whether on their maturity or otherwise, is not allowable to be taken out of indiathe second proviso to the sub-clause seeks to provide that where the individual who is a non-resident indian in the previous rear in which the bonds are acquired, becomes a resident in india in any subseouent year the interest received from such bonds wih continue to be exempt in the subsequent vears as w ell the third proviso to the sub-clause seeks to provi»^e that in a case where the bonds are encashed in a previous vear p^or to their maturity by an individual who is so entitled, the exemption in relation to the inte­rest income shall not be available to such individ'ial in the assessment year relevant to such previous year in wh'ch the bonds have been en­cased- the explanation to the sub-clause se^ks to define the expression "non- rmidant rndian, sub-clause (c) seeks to substitute clause (21) [w  it stood immedlattly before its omission by clause(k) of section 6 of the direct tax laws (am-•ndment) act, 1987] by a new clausethe substituted clause exempts the income of scientific research asso­ciation for the time being approved under clause (ii) of sub-setion (1) of section 35 however, such exe mption is subject to the satisfaction of the following conditions—(i) it has to apply its income or accumulate it for application, wholly and exclusively to the objects for which it is established-' such accumulation will be governed by the provisions of subsection(2) and sub-section (3) of section 11 with appropriate modifications;(ii) it has not invested or deposited its funds (other than voluntary contributions received and maintained in the form of jewellery, furniture or any other article as notified by the board) during the previous -year otherwise than in any one or more of the forms or modes specified in sub-sertion (5) of section 11 however, such condition will not be applicable in relation to any income of such association being profits and gains of business this amendment shall take effect from 1st day of april, 1990 and will be relevant for assess­ment year 1990-91 and subsequent yearssub-clause (d) seeks to substitute clause (23) [as it stood immediately before its omission by clause (k) by section 6 of the direct tax law (amendment) act 1987], by a new clausethe substituted clause empowers the central government to notify an association or institution established in india having regard to the fact that the association or institution has as its object the control, super- tision, regulation or encouragement in india of games of cricket, hockey,' football, tennis or such other games or sports, as the central government may, by notification in the official gazette, specify in this behalf the notification, however, shall at any one time have effect for not more than three assessment years fincluding an assessment year of y e a n  com­mencing before the date of issue of such notification)however, such exemption will be subject to the satisfaction of the following conditions,—(i) the association or institirtion shall make an application in 'ae prescribed form and manner to the prescribed authority for the purpose of grant of such exemption, or continuance thereof;(ii) the association or institution shall furnish such docxm^ents (including audited annual accounts) or information which the cen­tral government may consider necessary in order to satisfy the genuiness of activities of the association or institution;(iii) the nssociation or institution shall apply its income or accumulate it for application wholly and exclusively to the objects ♦or ^hich it is est?bl1shed the provisions of sub-sections (2) and(3) of section 11 with certain modifications mrill apply to the accu­mulation of the income;(iv) the institution or association shall not deposit or invest its funds (other than voluntary contributions received and maint^inoh in the form of jewellery, furniture or any other article as notified by the board) during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 further as a saving clause it is provided that any funds invested or deposited before 1st day of april, 1989 in any form or mode other than that specified in section 11(5), shall have to be invested or de­posited in the form or mode specified in section 11 (5) on or before the 30th day of march, 1990(v) the institution or association shall not contribute any part of its income in any manner to its members except as grants to an fsssociation or institution affiliated to itthis amendment will take effect from 1st day of april, 1990 and will be relevant for assessment year 1990-91 and subsequent yearssub-clause (e) seeks to substitute sub-clauses (iv) and (v) of clause (23c)the substituted sub-clauses (iv) and (v) empower the central clovefmment to notify—(a) any fund or institution established for charitable purposes, having regard to its objects and importance throughout india or throughout any one or more states; and(b) any trust or institution, which is either wholly for public religious purposes or wholly for public religious and charitable pur­poses, having regard to the fact that it is administered and super­vised in a manner to ensure that its income is properly applied for its objects, ■for the purpose of grant of exemption from income-tax of the income of such fund, trust or institutit®however, for getting the exemption from income-tax, the fund, trust ox institution will be subjected to the requirement of—(a) making an application in the prescribed fofm and manner to the prescribed authority for the purpose of grant of such exemp­tion, or continuance thereof ;(b) furnishing such documents (including audited annual ac­counts) or information which the coitral government may consider necessary in order to satisfy itself about the genuineness of the actitrities of the fund or trust or institution;(c) applying its income, or accumulating it for application, wholly and exclusively to the objects for which it is established;(d) not investing or depositing its fimds (other than voluntary contributions received and maintained in the form of jewellery, ftirniture or any other article as the board may, by notification in tiie  official gazette, specify) for any period during the pre^oas y e »  otherwise than in any form or mode specified in sub-sectien (5) of section 11;(e) disinvesting by the 30th day of march, 1990, all the invest­ments made before the 1st day of april, 1989 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 ;  however, the grant of exemption from                                          income-tax will not tpply to any income in the natxire of profits and gains of business unless the business is incidental to the attainm ent of its objectives and separate books of account are maintained by it in resp-ect of such business   further, the tax exemption granted to the fund or trust or institution notified in this behalf will relate to such assessment year or years, net exceeding three assessment lyears at any one time, as may be specified in the notification, including an assessment year or years which com- m ^iced before the date of issue of the notificationsub-clause (f) of this claiise seeks to amend clause (23d)   the provisions of clause (23d) provide for exemption of income of a m utual pimd set up by a pubbc sector bank or a public financial institu­tion as may be specified by the central govemmoit, by notification in the official gazette and subject to certain conditions including the condi­tion that at least 90 per cent of the annual income of the said fund thall be distributed to the unit-holders   sub-clause (f) seeks to withdraw the ccmdition relating to distribu­tion of at least 90 per cent, of the annual income of the mutual fund amongst the imit-holders with effect from 1st day of april, 1988   clause 5 seeks to amend section 11 of the income-tax act providing exduslmi of the income from property held for charitable or religious purposes from the total income of the previous year of the person in receipt of the income    subdsuse (a) (i) of this dau<;e seeks to insert a new clause '(d) in sub-section (1) of section 11 so as to exclude the corpus donations from the total income of the trust under section 11 this amendment u con sequent to the amendment made by the direct tax laws (amendment) act, 1987 in the definiticm of 'income' whereby corpus donations are in­cluded within the definition of 'income' of a wholly or partly charitabk or religious trust since stipulation regarding expenditure to the extent of 75 per cent, of the income «nd accumulation to the extent of 25 per ?ent thereof during the year as provided in clauses (a) and (b) of sub- section (1) of section 11 cannot be made applicable to corpus donations the proposed amendment in section 11 has become necessary to exclude the corpus donations from the total income of the trust under section 11   as a result of this amendment the corpus donation will be included in the total income of the trust only if it loses the exemption of sec­tion 11   sub-clatise (a) (ii) of this clause seeks to amend clause (2> of the explanation to sub-sectirai (1) of section 11 by omitting the references to subsection <(2) of lection 139 and power of the income-tax officer to extend the                  for filing of the return provided in that section- llils amendment is consequential to the amendment made by the direct tax       (amendznent) act, 1w7 in section 189 of the income-tax a ctsub-clause (b) of this clause seeks to amend sub-section (5) of sec­tion 11 so as to include public sector companies in the list of institutions where the investment or deposit can be made under that sub-section it also proposes to enable the central government to prescribe any other form or mode of investment or deposit for the pxupose of this sub-sectionclause 6 seeks to amend section 32a of the income-tax act relating to investment allowanceclatise 6 seeks to amend section 32a of the income-tax act relating to that in respect of a ship or an aircraft acquired or a machinery or plant installed after 31st march, 1988, deduction in respect of investment allov/ance shall be allowed at, the rate of 20 per cent, of the cost thereof sub-clause (a) (ii) seeks to insert an explanation to provide that for the purposes of investment allowance, the actual cost shall mean the actual cost of ship, aircraft, machinery or plant to the assessee as reduced by any amount which has been met out of the amount released from the d ^elopm ent bank in accordance with sub-section (6) of section 32absub-clause (b) seeks to amend sub-section (2) to provide that daases"(a) and (b) thereof shall not apply in relati(»i to a new ship or new aircraft acquired or new machinery or new plant installed after 31st march 1987, but before 1st april 1988sub-clause (c) seeks to amend sub-section (2c) relating to invest­ment allowance in respect of new machinery or plant used to assist in control of pollution or protection of «ivircament to provide that invest­ ment allowance at the rate of 35 per cent, shall be allowed only in respect of such machinery or plant installed before the 1st april, 1987sub-clauses (d) and (e) seek to carry out amendments of a conse­quential naturesub-clause (f) seeks to substitute existing sub-section (8b) by new fub-sectlons (8b) and (8c)the new sub-section (8b) provides that notwithstanding anything contained in sub-section (8) or any notification issued thereunder the provisions of investment allowance wiu apply tn respect of a ship or aircraft acquired or machinery or plant installed after 31st mardi, 1988, but before such date as the central government may, by notification in the official gazette, specifythe n»w sub-section (8c) provides that where a deduction has been allowed in any assessment year in respect of investment allowance, no deduction shall be allowed to the assessee under section 32ab in respect of investment deposit account in the said assessment year and in the four immediately succeeding assessment yearsclause 7 seeks to amend section 32ab of the income-tax act relating to investment deposit account by substituting sub-section (10) by a new sub-sectionthe new sub-section (10) provides that where a deduction has been allowed to the assessfee in re^>ect of investment deposit account ^  ittsessmimt y :ar no deduction shall be allowed to the assessee in respectof investm ent allowance under sub-secticm (1) of section 32a in the said assessm rat year and in the four                                     immediately succeeding                                                               assessment years                                  1   clause 8 seeks to amend clauses (ii) and                                               (iii) of section 35 of the income-tax act [as it stood immediately prior to its omission by section 10 of the direct tax laws (amendment) act, 1967] dealing with deduc­tion from profits and gains of business or profession of expenditure on scientific research carried out by a                                     scientific research association or a university, college or institution approved under those sub<lausesas a result of the amendment proposed, the prescribed authority, by notification in the ofibcial gazette, will approve,—(a) scientific research associations, university, college or institu­tion, for the purpose of section 35(l)<ii);(b) a university, college or other institutions to be used for research in social science or statistics research related to the class of business carried on, for the purpose of section 35( 1) (iii)amendment also proposes to make the following stipulations:—    (i) that the scientific research association, university, college or other institution                     referred to in clause (ii) or clause (iii) of this section shall make an application in the prescribed form and manner to the prescribed authority for the purpose of grant of approval, or continuance thereof under these clauses;    (ii) the prescribed authority may,                                          before granting                                                            approval under clause (ii) or clause (iii), call for stich documents (including audited annual accounts) or information from the scientific research association, etc in order to satisfy itself about the genuineness of the activities of the research association, etc;    (iii) notification issued by the prescribed authority under these clauses shall at one time have effect for not more than three assess­ment years, including an                             assessment year or                                                   assessment                                                                 y ean  commencing before the date on whidi such notification is issued' <(as may be specified in the notification)  the above amendments will take effect from the 1st day of april, 1900 and 'will be relevant for assessment year 1990-91 and subsequent assess- m m t years  clause 9 seeks to amend section 40 of the income-tax act relating to amounts not deductible   under the provisions of clause (b) of that section [as it stood imme­diately before its substitution by clause (ii) of section 13 of the direct tax laws             (amendment) act, 1987] any                                             payment of interest, salary, bonus, commission or remuneration made by the firm to its partners is not allowed as a deduction in computing the income of the firm  under the proposed amendment, a new clause (ba) is being inserted to provide that any payment of interest, salary, bonus, commission or m um eration made by an association of persons or a body of individuals to tis m em bos will also not be allowed as a deduction in computingincome of the association or body explanations 1 to 3 to the new clause are on the same lines as explanations 1 to 3 in the existing clause (b)clause 10 seeks to amend section 44ac of the income-tax act by in­serting a proviso to clause (a) of sub-section' (1) thereofthe new proviso provides that clause (a) relating to determination of profits in the trading of goods, in the natiure of alchoholic liquor for human consumption (other than indian made foreign liquor), at 40 per cent, of the purchase price, shall not apply where the goods are not ob­ tained by way of auction and where the sale price of such goods to be sold by the buyer is fixed by or under any state actclause 11 seeks to amend sub-section (1) of section 64 of the incon»- ttix act [as it stood immediately before its amendment by section 17 of the direct tax laws (amendment) act, 1987] dealing with the circiunstances under which the income of the spouse, minor child, etc, is in­ cluded in the total income of the individualunder the existing provisions of clause (v) of that sub-section, income from assets transferred by an individual to his minor child (not being a married daughter) is clubbed with the iix»m e of the individual d an se (vii) of that sub-section similarly deals with the assets transferred by am individual to any person or association of persons for the benefit of ms spouse or minor child (not being a minor daughter)under the proposed amendment, sub-clause (a) s e ^  to omit tiie brackets and words " (not being a married d au^ ter)'', which qualify the term "minor child" used in the said clauses (v) and (vii) as th© use of these words has become unnecessarythe existing explanation 3, below that sub-section applies to clauses(iv) and (v) only and clarifies that where the assets transferred by an individual to his spouse or his minor child are invested in any business, the income proportionate to the investment out of the transferred assete v/ill be clubbed with the income of the transferorunder the proposed amendment sub-clause (b) seeks to substitute a new explanation for the existing explanation 3 the new explanation, applies to clause (vi) also relating to assets tranrferred by an individual to his son's wife or son's minor child and thus removes a lacxma in the existing provisionsclause 12 seeks to insert a new section 67a after section 67 of the income-tax act [as it stood immediately before its substitutioli by section 18 of the direct tax laws (amendment) act, 1987,] dealing with the method of computing a partner's share in the income of the firmthe new section provides for the method of computing a member's share in the income of an association of persons or a body of individuals, wherein the shares of the members are determinate, in the same manner as provided for in sub-sections (1) to (3) of section 67 for ctanputing a partner's share in a firmclouse 13 seeks to amend section 80c of the income-tax act relating to deduction in respect of life insurance premia, contributions to provident fund, etcsub-clause (a) (i) af this dause sedcs to remove the limit of bs 10/m)0 from clause (d) of sub-section (2) of this section in respect of contribu­ tions from employees participating in a recognised provident fundsub<clause (a) (ii) of this clause seeks to amend clause (h) of sub­section (2) of this section so as to extend the benefit to a public sector company or a imiversity established by law or a college afbliated to such imiversity i sub-clause (b) of this clause seeks to amend sub-<section (8) by inserting a new clause so as to clarify that the contribution to any fund f^all not include any sums in repayment of loan taken from that fundclause 14 seeks to amend section 80cc of the income-tax act relating to deduction in respect of investment in certain new sharesthe proposed amendment seeks to extend the benefit of deduction to investment in shares of hotels approved by the prescribed authorityclause 15 seeks to amend section 80hhc of th bicome-tax act relating to deduction in respect of profits from export businesssulxlause (a) seeks to amend sub^sections (1) and (la) by substi­tuting the words "whole of the income" by the word "profits" to remove certain doubtssub-dause (b) seeks to amend sub-section (4) as the basis for calcu­lating ^  deduction has been changed from net foreign exchange reali­sation' to "export turnover"sub-dause (c) sedcb to amend sub-section (4a) to substitute the word "income by the word "profits" to remove certain doubtssob-dause (d) seeks to omit the definition of "net foreign exchange reauation from the expumction as the same will not be required after the amendment to sub section (4) ctauses (d) and (c) accordingly being renumbered as dauses (c) and (d) clause 16 aeeks to insert a new section 80hhd in the income-tax actsub-section (1) of the new section provides that in computing inc<mne of an assessec, being an indian company or a person (other tiian a company) resident in india, engaged in the business of a hotel whidi is for the time being approved by the prescribed authority or of a travel agoit, deduction will be allowed of a sum equal to the aggregate of—(a) fifty per cent of the profits derived by him from services pntvitjed to foreign tourists; andr(b) so much of the amount out of the remaining profits derived by it from services provided to foreign tourists, as is ^uted by the assessee in the profit and loss account and credited to a reserve account to be utilised by the assessee fw the purposes of ma business, in the manner laid down in sub-section (4) ■sub-section (2) of the new section provides that the provisions of new section shall apply «ily tc services provided to foreign tourists the receipts in relation to whldi are received by tfie assmsee in convertate f'^rel^ exchangesub>section (3) of the new section provides that for the purposes of sub-section (1) the profit derived by the assesses from services provided to foreign tourists shall be,—    (a) in a case where the business carried on by the                                                         assessee consists exclusively of services provided to foreign tourists resulting in receipts in convertible foreign exchange, the profits of the business as computed under the head "profits and gains of business or profes­sion"; and    (b) in a case where the business of the assessee does not consist exclusively oi services provided to foreign tourists                                                          resulting in receipts in convertible foreign exchange, the amount which bears to the profit of the business of the ass^see the same proportion as tiie receipts in convertible foreign exchange on account of services pro­vided to foreign tourists bear to the total receipts of the business carried on by the assessee  sub-section (4) provides that the amount credited by the assessee to the reserve account under clause (b) of sub-section (1) shall be utilised by the assessee before the expiry of a period                                                 of five years from the year in which the amount was credited for the following purposes;—    (i) construction of                           new hotels                                         approved by the                                                             prescribed authority or expansion of facilities in existing hotels already s-j  approved;(ii) purch&se of new cars and new coaches by travel agents;(ill) purchase of sports eqxiipments for mountaineering, trdcking, golf, river-rafting and other sports in and on water;(iv) construction of conference or convention centres;(v) provision of such new facilities for the growtii of ihdiao tourism as the central government may, by notification in the offldal gazette, specify for this purposethe proviso to the sub-section provides that where any of the afbr^ said activities would result in creation of any asset owned by the assessee outside india, such asset should be created only after obtaining prior approval of the prescribed authoritysub-section (5) seeks to provide that where any amount credited to the reserve accoimt has been utilised by the assessee for any purpose other than tliose referred to in sub-section (4) then the amount so uti­lised shall be deemed to be the profits of the assessee in the year of utilisation and shall be charged to tax accordingly similarly, where am' amount credited to such reserve account has not been utilised in the manner specified in sub-section (4) the amount not so utilised shall be deemed to be the profits in the year immediately following the period of five years specified in sub-section (4) and shall be charged to tax accordinglysub-section (6) provides that the deduction under sub-section (1) shall not be adtrrfsslble xmle&s the assessee furnishes in the prescribed from along with the retxim c t incwne the report of an accountant certi­fying that the deduction has been correcuy claimed on the basis of the sn ount of convertible foreign exchange received by the assessee in res­pect of services provided by him  to foreign tourists for this purpose ac­countant wiii be a person defined in explanation below sub-section (2) of section 288clause (a) of the explanation defines travel agent to mean a travel agent or any other person, not being an airline or a shipping company, who holds a valid licence granted by the reserve bank of india under section 32 of the foreign exchange regulation act, 1973clause (b) of the explanation provides that for the purposes of this section, "convertible foreign exchange" shall have the meaning asngned to it in clause (a) of the explanation to section 80hhc  clause (c) of the explanahon provides that "services                                                           provided to foreign tourists'' shall not include any services provided by way of sale in any shop owned or managed l>y any person who carries on the busi-     of a hotel or of a travel agent  ckivse 17 seeks to am w d sectitm 86 of the income-tax act [as it stood immediatd;y before its substitution by section 29 of the direct tax laws (amendment) act, 1987] relating to shares of partners in the income of an unrecistered firm or the shares of members of an association of per­sons or a body of individuals in the income of the associatipn or body    under the existing provisions of clause (v) of that section, income-tax  shall not be payable in respect of share of a member in the income of the  association of persons or body of individuals on which income-tax has  already been paid by the association or body, although the share shall  form part of the total income of the member  under the proposed amendment, clause (v) of that section is being substituted by a new clause which {hvvides that income>tax shall not be payable in respect of share of a member in the income of (he association of persons or body of individuals, computed in the manner provided in section 67a                        i    the first proviso to that section lays down that where the associa lio n  or the body is chargeable to tax at the maximum marginal rate or any higher rate, the share of the member shall not be included in his total income at all the second proviso lays down that where                                                                   no in­come-tax is chargeable on the total income of the association                                                                   or thebody, the share of the member therein shall be chargeable to tax as part of his total income clause 18 seeks to amend section usa of the income-tax act  sub-dauses (i) and (ii) seek to insert clauses (ab) and (ib) in sub­section (1)' "nie new clauses seek to provide that where the total in- cwne of a foreign company includes any income by way of income received in respect of the units of a mutual fund specified under clause f23d) of section 10, purchased by the foreign company in foreign cur­rency, income-tax                      income from such units shall be calculated at therate of twenty-five per cent, of fuch income&ub<iause (iii) seeks to caxry out an amendment of consequentia: nature omitting clause (b) of the explanation to section 115a d»finin£ the term foreign company" and relettering clause (bb) as clause (bolause 19 seeks to amend section 115j of the income-tax actsub-clause (a) seeks to amend sub-section (1) to provide that li-e provisions of the sub-section relating to taxabiuty of thirty per cenl o£ the book profits of certain companies shall not apply in the case of an assessee engaged in the business of generation or distribution of electri­citysub-clause (b) ^eeks to amend the expianai4on to provide that for the computation of book profits, the net profit shall be inoreased by—(i) any amcunt withdrawn from the reserve accoudt under section 80hhd that has been utilised for any purocse other than those referred to in sub-section (4) of that section;(ii) the amount credited to the resen/e account under section 30hhd to the extent that amount has not been utilised within the period specified in sub-section (4> qf that section, if the said amounts have not been credited to the profit and loss accountitem (vi) of sub-clause (b) seeks to amend the explanation to pro­vide that for the computation of the book profits the net profit shall be reduced by the eunount of net profits derived from the business of ex­ports or from services provided to foreign tourists by approved hotels or travel agents, which are eligible for deduction under section 80hhd or 80hhd, as the case muy be for tiiis purpose, the net profits siiall be computed in the same manner as specified in sub-section (3) of section 80hhc or sub-section (3) of section 80hhd, as the case may beclause 20 seeks to amend section 139 of the income-tax act [as amended by section 42 of the direct tax laws (amendment) act, 1987] relating to return of income the amendments are proposed in sub­section (4a) and clause (d) of the proviso to sub-section (10) of this section, relating to the provisions for filing of returns by chaiitabie or religious trusts or institutions governed under section 11 of the incometax act these amendments seek to bring back the provisions as they stood before the amendments made by the direct tax laws (amend­ment) act, 1987 and are consequential to the revival of the provisions of sections 11 to 13 of the income-tax act and omission of section 80f of tile income-tax act clause 21 seeks to amend section 143 of the income-tax act relating to procedure for assessment, as substituted by section 48 of the direct tax law^ (aniendmeni) act 1987under the provisions of cumse (a) o£ sub-ssction (!) of n™  section 143, where a return has been filed under section 1s9 or under sub-section(1) of section 142--(i) if anv tax or interest is found due on the basi of such turn an intimation shau be sent to the " tlo  piiyable and such inumation shau be deemed to be a notice of demand issuad under section 156; and (ii) if aii^v refund is due on the basis of such return, it shall be j granted to the assesaeethe proviso to the said clause enables the department to make cer­tain adjustments in the returned income or losssub-clause (a) seeks to insert a further proviso in the said clause to provide that an intimation for any tax or interest due under this clause shall not be sent after the expiry of two years from the end of the assessment year in which the income was first assessable ^sub-clausc ,(b) seeks to insert a new subjection (la ) which provides for— , ;<a) levy of an additional income-tax of an amount equal to twenty per cent of the tax payable on the amount of difference bettt'een the total income determined under , sub-section (1) of this section and the total income declared in the return;(b) increase or decrease o£ the amount of additiorial income-tax as a consequence of an increase or decrease in the amount on which additional income-tax is payable by reason of a rectification order passed under section 154 or appellate order imder section 250 or sec­tion 254 or section 260 or section 262 or section 264 or a revisionarj'' order under section 263clause 22 seeks to amend section 144a relating to power o£ deputy commissioner to issue directions in certain cases as a result of the amendment in the explanation to that section for the word "sub-section" the word "section" is proposed to be substituted ttiis is consequent tj the omission of sub-section (2) in this section b/' the direct tax laws (amendment) act, 1987clause 23 seeks to amend section 147 'of the income-tax act relating to income escaping assessmentunder the provisions of new section 147, as substituted by section of the direct tax laws (amendment) act, 1987, the assessing officer is empowered to assess or re-assess income which has escaped assessment for any assessment yeai% after recording reasons for doing sounder the proposed amendment, the words "for reasons to be record­ed by him in w t iting, is of the opinion" are being replaced by the ex­pression ' has reasons to believe", which occurred in section 147 l>efore its amendment by the direct ta\ lavvs (amendment) act, 1937clause 24 seeks to amend section 148 of the income-tax act relating to issue of a notice where income has escaped assessmentunder the provisions of new section 148, as substituted by section 54 of the direct tax laws (amendment) act, 1987, the assessing officer, before making the assessment, re-assessment or recomputation of income under section 147, shall serve on the assessee, a notice requiring him to furnish the return of iiicorne within such period, not ^leinp less than thirty day«, as may be specified in tho noticeuikjor the |>rop&sed amendment, sub-section (2) is being inserted to provide that bexore issuing'a notice, ti e assessing oflrcer shall record his reasons for doing soclause 25 seeks to amend clause (b) of sub-section (4a) of scctlon 155 of the income-tax act in consequence of insertion of a proviso in sub-3ection (1) of sectiort 32a vide clause 6clause 26 seeks to substit'-te the existing sub-headmg -'dd-assoda- tion of persons—special cases" by a new sub-heading "dd^aesociation of persons and body of individuals" in chapter xv of the income-t?x a ct clause 27 seeks to omit section 167a of the income-tax act [as it stood immediately before its substitution by section 66 of the direct tax laws (amendment) act, 1987] relating to charge of tax in the case of association of persons wherrin the shares of the members are indeter­minate or unknown at the maximum marginal rateclause 28 seeks to insert a new section 167b in the income-tax actsul>secti(mi (1) of that section provides that where the individuel shares of the members of an association or a body in the whole or any part of the income of such association or body are indeterminate or un­known tax shall be charged on the total income of the association or body at the maxiratim marginal rate hov/ever, where the total income of any member of such association or body is chargeable to tax at a rate which is tiigher than the maximum marginal rate; tax shall be charged on the total income of the association or body at such higher ratesub-section (2) of that section provides that where the total income any member of an associaticm of persons or body of individuals referred to in sub-secfion (1) for the previous year (excluding his share from such association or body) e::ceeds the maximum amount wliich is net charge­able to tax in the case of that member, tax shall be charged on the tot«l income of the association or body ot the maximum marginal rat«- how­ever, where any member or members of such association or body is or are cliargeable to tax for the pre\aous year at a rate or rates which is or are higher than the maximum marginal rate, tax shall be cliarged on that portion portions of the total income of the association or body which is or are relatable to the share or shares of such member or members at such higher rate or rates, as the case may be and the balance of the total income of the association or body shall be taxed at the maximiun marginal rateexptanat'on to that section specifies the circumstances in which shares of tlie members of an association or body in the whole or any part of the income ot srch association or body shall be deemed to be indeterminate or unknownclause 20 seeks to amend sub-section (1) of section 190 of the income- ta;: act- it is proposed to provide that in spite of the feet that regular assessment is to be made in a inter assessment year, tax on income shall also be payable by way of collection at source in accordance with the provisions of section 206cclause 30 seeks to amend section 194a of the inix)me-tax act relating to deduction of tax at source fi-om interest other than interest on securi­tiessection 73 of the direct tax laws (amendment) act, 19ot had omit­ted with effect from 1-4-1988, clause (iv) of sub-section (3) of section 194a which pi-o\ided that tax shall not be deducted at source from any' interest credited or paid by a firm to its partnersunder the proposed amcq^ment, the said clause (iv) is being rein­serted in the said sub-section (3) retrospectively with effect from 1-4-1988claitse 31 s e ^  to « n lt section 194e of the income-tax act tas inserted by section 74 of the direct tax laws (amendment) act 1s87] relating to deduction of tax at source from interest, salary, ixjnus, commission or remuneration paid by a firm to its partners with effect from 1st day of april, 1988 consequently, no tax shall be deducted at sowrce from in­terest salary, etc paid by a finn to its partnersclause 32 saeks to substitute a new section for section 196a of the income-tax actsub-section (1) of new section 196a seeks to provide that no deduc­tion of tax shall be made from ary income payable in respect of units of a mutual fund, specified under clause (23d) of section 10 to its tmit holders being persons other than foreign companiessub-section (2) of that section seeks to provide that where the unit holder is a foreign comp>any, the person responsible for making 'the pay­ ment will, a t  the time of credit of such income to the account of litae pa^ree or at the time of payment thereof in cash or by the issue of a dieque or draft or any other mode, whichever is earlier, deduct incometax on the sum so paid, at the rate of tw-enty-five per cent, these amendments vn'l come into force on the date of assentclause 33 seeks to amend sections 198 199 200 202, 203 sub-section(1) of section 203a, section 205 nnd sub-section (f?) of section 215 of the income-tax act so as to ?nscrt a reference to new section 196a being inserted vide clause 32 clause 34 se^ks to amend «eofion 208c of the income-tax a^-sub-clause (a) seeks to amend sub-section (1) of the said section by substituting the words 'ten per rent" by the words "five per c e n f  occurrintf in column (3) afrain'^t item ciii) of the ta^le below that sub­section thereby providing that in respect of timber obtained by any mode other than a- forest lease, income-tax shall be collected at the rate of five per cent of the purchase price payable by the buyer'rie proposed iimendm?nt ehnll come into force retrospectively from the 1st june, 1988 ;clause (b) seeks to insert a new sub-section (5a) in the said section to provide that every penson collecting tax n accordance vi^th the pro­visions of section 20cc, shall prepare half yearly returns for the period ending on the 30th september and 31st march in each financial year and deliver or cause to be delivered to the prescribed inrome-tax authority mich tettim«» in such form end verified in s'lch mannf'r and setting forth fuch particulars as may be prescribed in the rulesdomc 35 seeks to amend sub-section (1) of section 209 of the inccmetax act regarding computation of advance tax it is f>roposed to provide in clause (d) of that sub-section that the income-tax calculated for the purpose of pdvance tax shall also be reduced by the amount of incometax which v/ould be collectible at source in accordance with sub-section(1) of section 206c (the proposed amendment shal! come into force retrospectivelv from the 1st june, 1988claxise 36 seeks to amend the provisions of sections 222, 223, 224, 225, 226, 228 and 228a of the income-tax act relating to tax recovery to -give effect to change in designation of income-tax officer as "assessing ofbcer" made by the direct tax laws (amendment) act, 1987 with effect frwn 1-4-1988clause 37 seeks tc amend section 226 of the income-tax act [&£ am­ended by section 36 of the direct tax laws (amendment) act 1988] by inserting the words "or tax recovery officer" after the words "assess­ ing officer", wherever they occur, in sub-sections (2) (3) (4) and t'5) of that sectionclause 38 seeks to amend section 234a of the income-tax act as inserted by section 94 of the direct tax laws (amendment) act, 1987the provisions of section 234a which provide for levy of mandatary interest for defualts in furnishing retuitis of income, are proposed to be amended so as to provide for c h a r ^ g  of intraest in tespect of miy default in furnishing return of income, on the amount of tax on the total income as determined undw sub-section (1) of section 143 or on regular assessment after giving credit for any advance tax paid, tax deducted at source or tax collected at sourcea new explanation 4 to sub-section (1) is proposed to be introduced to provide that for the purpose of computing the interest payable under section 140a, the tax on the total ince«ne as determined under sub­section (1) of section 143 or on regular assessment shall be deemed to be tax on total income as declared in the return this is necessary to enable the tax payers to pay the amount of interest along with the tax under self-assessment as is required under section 140aclauae 39 seeks to amend section 234b of the income-ta>: act as inserted by section 94 of the direct tax laws (amendment) act, 1987 the provisions o? section 234b which provide for levy of mandatory interest for defaults in payment of advance tax, are proposed to be amended so as to provide for charging of interest in respect of any defeult in pavment of advance tax on the amount of the tax on the total income ns determined under sub-section (1) of section 143 or on re^ lar , assessment iiftor giving credit for any advance tax paid, ta:: deducted at source or tax collected ?t sourcefurther, expumction 1 to sub-section (1) is substituted so as to provide that "assessed tax" would mean,—(a) far the purpose of computing the interest pavable nnder section 140a the tax on total income as declared in the return as reduced by &n amoiuit of tax deducted or collected at source in wjcordance with the provisions of chapter of the incometax act;  (b) in any other case, the tax on the total income determined under sub-section (1) of section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of chapter xvii of the income-tax actsub-clausc (a) (iii) seeks to substitute explanation 3 by a new expla- aolioti so as to provide that for tfie purposes of collecting interest under this section tpx would not include the additional tax, if any, pavable under section 143sub clauses (b) and (c) of this clause seek to amend sub-sections(2) and (3) so as to insert reference to the determination of total inen n e imder sub-section (1) of section 143 explanation to sub-section(3) is also proposed to be omittedclause 40 seeks to amend section 234can assessee is required to pay advance-tax in three instalments on its estimated total income including capital gain and income arising from winnings from lotteries, horse races, etc the provisions of section 234c provide for levy of mandatory interest for deferment in payment of advance tax numerous represoitations rec«ved pointed out hardrfiip on account of inability to esitimate correctly the expected income from capital gain, or winnings from lotteries, horse races, etc which are of casual nature in order to remove this unintended hardship, the provi­sions of section 234c are being amended to provide that no interest will be levied in raspect of any sboitfau in the pa^tnent of advance tax due on the returned 'ncome if—(i) the shortfall is on account of underestimate or failure to estimate the amount of capital gains or income of the nature referred to in sub-clause (ix) of clause (24) of section 2; and(ii) the assessee has paid the whole of the amount of tax p ay^ le in respect of such income, as part of the instrlment of advance tax which is immediately dueclaxue 41 seeks to jimend section 244a of the income-tax act (as in­serted by section ^  of the direct tax laws (amendmenfj arl 1987], sub-clausc (a) seeks to amend rub-section (1) so as to enable the assessee to claim interest on refund due to it also in pursuanr;e of the detotnination of total income under sub-section (1) of section 143further, clause (a) of sub-section (1) is proposed to be amended so as to include tho tax collected at source under section also for cal­culation of interest on the refund due to the assesseesub-rection (3) is being amended to include the reference of the order passed under pub-section (3) of section 143 for the purports of calcula­ tion of interes' under this nib-sectioncljause 42 seeks to omit the words "or applications" in the sui>-heading t4j chapter x x  of the income-tax act consequents on the omission of section 246aclause 43 s e ^  to amend section 246 of the income-tax act [as sub> stituted by section 99 of the direct tax laws (amendment) act, 1987j relating to appealable ordersunder clauses (g) and (h) of sub-section (i) ol section 246, any assessee may appeal against an order of the assessing officer (other than the deputy commissioner) under various sub-sections of section 185 refusing to grant registration of renewal of registration to the firm or under section 186 carollin g the registration of the firm in respect of the assessment yeai 1983-89 or any earlier assessment yearunder the proposed amendment by sub-clause (a) (i), the words limiting the appeals under these clauses up-to the assessment year 1988-89 are being omitted consequently^ appeals under these clauses can now be filed even in respect of the subsequent assessment yearssub-clause (a) (ii) seeks to amend clause (1) of sub-section (1) by providing appeal to the deputy commissioner (appeals) against the orders passed by the assesjsing officer also under section 272aa and section 272bbthis sub-clause omits the reference of sub-section (1) of section 271 in sub-clause (iii) of clause (1) of aub-section (1) of this section conse­quent on amendment made in section 271sub-clause (b) of this clause seeks to amend sub-section (2) providing appeal to the comipissioaer appeals) against the order passed under section 104 in respect of assessment year 1987-88 or earuer years, against an order made by deputy commissioner imposing a penalty tmder section 272aa, and against an order imposing a penalty under chapter xxi by the income-tax officer or the assistant commissioner with the previous approval of the deputy commissionerclause 44 seeks to omit section 246a [as inserted by section 99 of the direct tax laws (amendment) act, 1987] relating to application by the assessee before the deputy commissioner (appeals) or cominissioner (appeals) for an advance ruling in certain casesclause 45 s^ k s to amend the proviso to sub-section (4) of section 249 providing forms of appeal and limitation- as a result of the amendment the discretion of appellate authority under sub-section (4) has been limited to the case •whore no return has been filed by tlie assessee and the assessee has not paid an amoimt equal to the amount of advance tax which was payable by him, before the filing of the appealclause 46 seeks lo amend section 253 of the income-tax act providing, appeals to the appellate tribunal the amendment in clause (a) of sub­section (1) of this section is consequent ou the omission of sub-section (2) of section 181 by the direct ta:r laws (amendment) act, 1987 tlie amendmeni in clause (e) of sub-section (1) provides an appeal against an order passed by chief cominissioner or director general or director under section 272aclou,se 47 seeks to amend section 255 of the income-tax act relating lo proceuiiro o( appellate tribunalunder the ezistuag provisions of sub-secuon (3) o£ that section, a single afember bench of i'ribunal m ay hear appeals pertaining u> an assesee whose total income as computed by ihe assessing officer in the case does not exceed forty thousand rupeesunder the proposed amendment the monetary lionit of forty thousand rupees is being raised to one lakh rupees-  , clause 48 seeks to amend clauae (b) of section 269a providing defini­tion of the competent authority under c'hapter xx-a relating to acquisi­tion of immovable prc^terties in certain cases of transfer to counter-act evasi<m of ta:cas a result of the amendment made by the direct tax laws (amendxnent) act, 19a? with effect feom 1st d iy  of april, 1988 in the designation of "income-tax authorities', the assistant commissioners of income-tax have been re-designated as deputy commissioners of income-tax consequently, the amendment is proposed m the definition of competent authority vath effect from 1>4-19b8 to mean a deputy commissioner income-tax authorised by the central govermnent under section 2ddb to perform the functions of a competent authority under chapter xx-aclause 49 seeks to eonend ckoise (a) of sub-section (1) of section 26w dealing with jurisdiction and functions of the competent authority under chapter xx-a relating to acquisition of immovable properties in certain eases of transfer to counter-act evasion of taxas a result of the amendment made by the direct tax laws (amend­ment) act, 1987 with effect from 1st day of april, 1988 in the cl e ^ natiob of "income-tax authorities'', the assistant commissioners of income-tax have been redesigiated as "deputy commissioneis of income-tax" consequently, the amendment is proposed in section 269b to provide that central government taay, by general or special order in the uf&dal gaaxtte, authorise the d ^ u ty  commissioners of income-tax to p&'form the functions of a competent authority under chapter xx-aclause 50 sed u  to amend section 271 [as it stood immediately before its amp-ndmgnt by section 106 of the direct tax laws (amendment) act, 1967] providii^ for imposition of penalty for failure to furnish returns, comply with notices, concealment of income^ etc- the clause seeks to carry out the following amendments in this section:—(a) the provi^ons relating to imposition of penalty for failure to furnish returns are being deleted in view of the provisions for levy of mandatory interest undn: section 234a;(b) the amount of penalty imposable for failure to comply with n o tic e  under sub-section (1) of section 142 or sub-s«x:tion (2) of section 143 or failure to comply with a direction issued under sub­section (2a) of section 142 is now being revised to a minimum amount of one thousand rupees and, up to a maximum junount of twenty-qve thousand rupees for each such failure the amoimt of penalty which was earlier imposablc was a minimum amount of ten per cent, and up to a maximum amoimt of fifty pfer cent, of the amount o£ tax, if any, wmeh would have been avoided if the income retiunied by such person had been accepted as the correct inccmc;(c) expumation 3 of sub-section (1) has been amended so aa to bring the references to the various provisions of the act in kne with the provisions as amended by the direct tax laws (amendment) act, 1987;(d) a new explanation 6 is being introduced to provide that penalty for concealment of income shall not be imposed <m so much of the income on which additional income-tax hsa been charged under the new sub-section (la ) of section 143;(e) a new sub-section (5) is being inserted to provide for a transitory provision so as to levy penalty in assessment year 1986-89 and any earlier assessment year in accordance with the provisions of section 271 aa they stood immediately before their amendment by the direct tax laws (amendment) act, 1988clause 51 seeks to amend section 273a [as amended by section 113 of the direct tax laws (amendment) act, 1987] dealing with the power to reduce or v, iiive penalty, etc, in certain casesthe clause seeks to carry out consequential amendments in this section as a result of—(a) the deletion of the provisions relating to levy of penalty for failure to furnish returns;(b) the amendments made in sections 139(8), 215, 217 and 273 by the direct tax laws amendment act, 1987; and(c) the amendments made in the penalty provisions under sec­tion 271 by clause 50clause 52 seeks to amend clause (a) of section 275 of the income-tax act relating to bar on limitation for imposing penalties, as substituted by section 116 of the direct tax laws (amendment) act, 1987 under the proposed amendment, the orders of the deputy commissioner (appeals) are also being included for the purpose of calculating the limitation periodclause 53 seeks to insert a new section 279b in the income-tax act to provide for production of evidence in prosecution for offenees under chapter xxh of the a ct the new section provides that entries in the records or other docu­ments in the custody of an income-tax authority shall be admitted in evif'"nce during proceedings for the prosecution of any person for an offence under chapter xxii of the act and all such entries may be proved either by the production of such records or other documents or by production of a copy of entries certified by the income-tax authority, having custody of such records or other documents, under its signatm-e and stating that it is a true copy of the original entries which are contain­ed in the records or other documents in its custodyclause 54 seeks to amend second schedule to the fiicome-tax act [as it stood immediately before its amendment by the direct tax laws (amendment) act, 1987] by substituting the words "assessing officer' wherever they occur, for the words "income-tax officer' with effect from the 1st day of april, 19882000 ls—12   as a result of this                         amendment in this                                               schedule, the words "tax recovery officer" are proposed to be substituted for the words "assessing officer" by making suitable                                amendments in the                                                      rules                                                             in                                                                 the said schedule                                     j  clause 55 seeks to am end,the third schedule to the income-tax act [«b it stood immediately before its amendment by the direct tax laws (amendment) act, 1987] by substituting the words "assessing ofibcer" lor the words 'incom e-tax officer" with effect from the 1st day of april, 1968   as a result of this am oidmeiit in this schedule, the words "or tax recovery officer" are prc^[x)6ed to be inserted after the words "assessing officer"  clause 58 seeks to am oid the tenth schedule to the income-tax act, as inserted by section 125 of the direct tax laws (amendment) act, 1987   the said schedule provides special provisions applicable in cases where the previoua year in relation to the assessment year commencing on the 1st day of april, 1989 (hereinafter referred to as the transitional previous y ear), exceeds a period of twelve mpnths  'n ie  proposed amendments to rule 1 of & e schedule, which defines th e  term  "transitional previous y e a r", are of consequential nature follow­ing the amendments made in sub-section (2) of section 3 of the ifk;ome- tex act   under the existing provisions of rule 3 of the schedule, the amoimts mentioned in various sections of the act, which are enumerated in a table given in the rule will be proportionately increased during the attended transitional previous yeard ie proposed amendments to rule 3 are as follows:—     (a)                 two new                                provisos are being                                                          inserted 1® the said rule to provide that:—    (i) the amount of rs 10,000/- mentioned in column (2) of the table against section                           48(2) shall be increased during the fcansitional previous year only where the long-term capital gain arises as a result of two or more transfers of long-term capital assets and out of these, at least one transfer is made during the initial period of twelve months and the remaining transfer or transfers is or are made beyond the said period of twelve months comprised within the transitional previous year           (ii) where more                              than one period in                                                   respect of                                                               different        sources of income are included in the transitional previous year        tin<to the first proviso or uie third proviso to section 3(2), the        amounts mentioned in column (2) of the aforesaid table shall be        increased to such extent and in such manner as a e board may        prescribe having regard to the length of the period or periods,        included in the teansitional previous year in respect of dyferenfc       floorces of income, the length of the transitional pteidous year        and other rdcvant factors(b) a new table is being substituted for the existing table the amount or amounts mentioned in sections 12a(b), 13<2) (g), 13(3) (b) the proviso to section 16(i), section 16(ii), provisoto secton 24(2) sections 33a, 3^a, 35ab, 35d, 40a(12), 80c(3), 80c (7)(c), 80cc(2)', 80cca(1) 80d(1), 80p(2) (c) and 80p(2) (£) of the act, which are also proposed to be increased proportionately during the extended transitional previous year, are being included in the new table opportumty has also been taken to correct some references to sections or amounts as also to enhance the amounts menticoied against fffrttffit 16(1) and 2nd proviso to section 80l(1) consequent to the amoidments made by the finance act, 1988 in those sectionsrule 4 provides that where the transitional previous year consists of a period of eighteen months or more, than the niunber of days specified in sub-section (1) of section 6 for determining the residential status of an individual, namely, 182 days and 90 days shall be increased to 271 days and 135 days, respectivelyunder the proposed amendment, the new rule 4 provides that tiie tfmg limit of 60 days mentioned in sub-section (1) of section 6 of the act wiu also be in c r e a ^  to 90 days where the extended previous year comprises of a period of 18 months or morerule 5 provides that where in a transitional previous year the assessee's icome under the head "profits and gains of business or profession" is icluded in the total income for a period of thirteen months or more, the depreciation allowance under clause (ii) of sub-section (1) of section 32 will be proportionately increasedunder the proposed amendments, the new rule 5 provides that increas­ed depreciation will also be available in those cases where depreciatibn is allowable imder the provisions of section 57 (ii) while computing income under the head "income from other sources", and that depreda­tion will be allowable on "block of assets" instead of ''building, machinery, plant or furniture" the proviso in new rule 5 provides that where rnore than one period in respect of income under the head "profits and gains of business er profession" or under the head "income from other sourceb are included in the transitional previous year under the first proviso or the third proviso to section 3 (2), the depreciation allowance under section 32 (1) (ii) on block of assets shall be calculated separately for each such period included in the transitional previous year and the said allowance ■vmll be increased, where necessary, by multiplying it by a fraction of which the nxmierator is the number of months in such period (after excluding the number of months relatable to the period in relation to which depreciation on block of assets has been allowed or is allowable in the previous year relevant to the assessment year commencing on the 1st day of april, 1988) and the denominator is twelverule 6 provides that tax will be payable on the total income of the transitional previous year at the average rate of tax applicable to the proportionate income of twelve monliisunder the proposed amendment, a proviso is being inserted to provide that where more than one period in respect of d'fferent of income are included in the transitional previous year under the first ptovim or th« tiiird proviso to lectlon s(2), then the tax diall be charge auc at the average rate of tax, calculated in a ^ rd a n ce with the provi­sions of this rule, on the total income of the transitional previous year after eaccluding from such total income the income relatable to any such period or periods, which has already been include or is includible in the total income of the previous year or previous years relevant to the assessment year 198»<89clause 67 makes amendments of a consequential nature in certain provisions of the income-tax a ct clause 58 seeks to amend section 2 of the wealth-tax act by insert ing a new explanation 2 in clause (m) after the existing explanation, in «rder to clarify that the debt mentioned in sub-clause (ii) in respect of an asset exempt either wholly or pai'tly under section 5(1 a) shall be limited to the value of the exemption which the said asset will get undtf the said section 5(1a )clause 59 seeks to amend section 4 of the wealth-tax act dealing with the inclusion of certain deemed assets in the net wealthsub-clause (a) of this clause seeks to amend sub-section (1) which contains two clauses (a) and (b) clause (a) deals with assets trans­ferred an individual to his or her spouse, minor children etc clause(b) deals with value of interest in a firm or association of persons of an assessee who is a partner in the firm or a member of the association of l-«rsons i ;the opening words of sub-section (1) have led to the interpretation that the sub-section is applicable only to cases of assessees who are individualsthe proposed amendments by sub-clause (a) seek to clarify that clause (a) of sub-section (1) applies to an individual and clause (b) would be applicable to any assessee the revised clause (b) of sub­section (1) also specifies that the value of the interest of the assessee in the firm or association of persons shall be determined in the manner laid down in new schedule iii the proviso to new clause (b) also includes the interest of £ minor child in a firm or association of persons in the net wealth of the parent having a higher net wealthsub-clause (b) of this clause seeks to omit sub-section (2) as rules 15 and 16 of new schedule iii now provide the manner in which the value of the interest of a person in a firm of which he is a partner or in an association of pers<his of which he is a member is to be determined clause 60 seeks to amend section 5 of the wealth-tax a ctsub-daiue (a) seeks to insert a new clause (xvig) in sub-section (1) t the new clause seeks to provide that in computing the net wealth of an individual who is a non-resident indian during the year ending on the valuation date or of a nominee or survivor of such individual or of any other individual receiving by way of gift from such individual, any investment made in the bmids sp ^ fied  under sub-clause (ild) of dause (isi) of section 10 of the income-tax act, shall not form part of such net wealththe proviso to the clause seeks to provide that where an individual who is a non-resident indian during the year ending on the valuation date in which such bond is accjuired, subsequently becomes a resident in india, the clause shall continue to apply in relation to such individual the explanation seeks to provide that for the purposes of this clause an individual shall be deemed to be a non-resident indian during the year ending on the valuation date if in respect of that year the indivi­ dual is a non-resident indian within the meanings of clause (e) of section 115c of the income-tax actsub-clause (b) seeks to insert an explanation at the end of sub- ^ t io n  (]a) in order to provide that where a debt is secured or has been incurred in relation to any asset referred to in tliis sub-section, the exemption under this sub-section shall be allowed first against the value of the asset on which or in relation to which such debt is secured or incurred and, thereafter, against the value of any other asset so referred , tosub-clause (c) seeks to insert a new sub-section (4) in order to pro­vide that where the assessee is a partner of a firm or a member of the assoda^on of persons and the firm or the association owns any one or more of the assets which are exempt under sub-section (1), then his interest in the firm or association shall be deemed to indude the value of a part of each of such asset of the firm or the association in the same proportion in which he is entitled to share the profits of the firm or the association and the assessment shall be made j^er allowing the exemp­tion under sub-section (1) in respect of those assets on the basis of this proportionate valuecutuse 61 seeks to amend section 6 of the wealth-tax act explana- tion la  to section 6 which refers to clause (4a) of section 10 of the income-tax act is being amended as the said clause (4-a^) has been re­numbered as sub-clause (ii) of clause (4) of the said section 10 by the direct tax laws (amendment) act, 1987clause 62 see!:? to substitute a new section in the wealth-tax act for the existing section 7 relating to the determination of the value of assetsas per the existing provisions, the value of any asset, other than cash, for the purpose of this act is to be taken as the price which it would fetch if sold in the open market on the valuation date it further provides that where the taxpayer is carrying on a business for which regular accounts are maintained, the wealth-tax officer may determine the net value of the assets of the business as a whole on the valuation date instead of determ ining separately the value of each asset held by him  in this business, and may make sudi adjvcstments as prescribed in the rulesthe substituted section 7 now sedts to do away with the above method of valuation under the new section the value of any asset <^er than on the valuation dale is to be determined in the manner laid down in schedule iii of thi act   however, sub-section (2) of the n6w section, gives                                                       option to the anrosmq in the case of a house belonging to him and exclusively used by him for residential purpose to opt the value determined in the manner laid down in schedule hi of this act^ as on the valuation date next following date on which he become the owmer of the house, or the value determined for the                     valuation date                                     relevant to the assessment year commencing on the 1st day of april, 1971, whichever valuation date is later   proviso to this sub-section seeks to restrict the above option only to one residential house if more than one house belonging to the assessee are excliisively used by him for residential purposes      explanation to this sub-scction seeks to clarify that where the house is constructed by the assessee, he' shall be deemed to have become the «wner thereof on the date on which the construction of such house was ciunpleted- it also seeks to clarify that a part of house being an inde­pendent residential unit shall be taken as a house  clause 63 seeks to amend section 11 of the wealth-tax act [as substi­tuted by secticm 131 of the direct tax laws (amendment) act, 1987] so a^ to substitute the reference to sub-section " (5)" occurring in sub­section (2) of that section by a reference to sub-section " (4)" -  clause 64 seeks to amend section 16 of the w ealth-tax act [as substi­tuted by section 138 of the direct tax laws                                               (amendment) act, 1987] rela'ing to procedure for assessment  the am endm ^its proposed by sub-clauses (a) and (b) are on the lines of amendments proposed in section 143 of the income-tax act vide clause 21           ■   clause 6& seeks to amend section 16a of the wealth-tax act relating to reference to valuation ofiscer  the proposed amendment provides that where under the provisiooa uf section 7 read with the rules made imder this act or the rules in new schedmle iii, the market vahie of any asset is to be taken into account in making an assessment, the assessing qflocer may refer the valuation <f such asset to the valuation officer   clatise 66 seeks to amend sub-section (1) of section 17 of the wealth- tax act relating to wealth escaping assessment  under the provisions of new sub-section (1), as substituted by clause(a) of section 1^  of the direct tax laws (amendment) act, 1987, the assessing officer is empowered to assess or re-assess                                                         the net                                                                  wealth which has escaped assessmmt for any assessment year, after recording reascms for d o i^  so  the proposed amendments in sub-section (1)                                                are on the lines of ftmfinr amendments made in sections 147 and 148 of the income-tax act oide'clauses 2z and 24                                  i  clause 67 seeks to amend section 17b of the wealtti-tax act                                                                 c«» inserted by section 141 of the direct tax laws (amendment) act, 1 9 ^on the aam« lines as amendments made in section 234a of the income-tax act vide clause 38   clause 68 seeks to amend section 18 of the wealth-tax act on the same lines               amendments made in section 271 of the income-tax act vide clause 50   clause 69 seeks to substitute section 18a of the wealth-tax act [as it stood immediately before its substitution by section 142 of the direct tax laws (amendment) act, 1987] by a new section so as to bring the provisions of this section on the same lines as those of section 272a of the income-tax act substituted by section iic of the direct tax laws (amendment^ act 1987  clause 70 seeks to amend section 18b of the wealth-tax act on the same lines as the amendments made in section 273a of the income-tax act inde clause 51  clause 71 seeks to amend section 23 of the wealth-tax act |>s amend­ed by section 146 of the direct tax laws (amendment) act, 1s87] pro­viding for fixst appeal against the orders of the assessing oflbcers am­endment in sub-section (1), clausc (d) is consequent to the amendment made in section 18 amendment in clause (b) of sub-section (la) pro­vides appeal against the orders passed imder sub-section (1) of section 18 with the previous approval o the deputy gammissioner as specified in sub-section (3) of that section  clause 72 seeks to amend section 26 of the wealth-tax act providing a ] ^ a l to the appellate tribxmal against the orders passed by the direc­tor general or director under section 18aclause 73 seeks to amoid section 34a of the wealth-tax act,         sub-clause (a) seeks to amend sub-section (1) so as to substitute the reference to "total income" by a reference to ''net wealth'' to rectify a factual error the amendments proposed by sub-clause (b) are on the same lines as the amendments made in section 244a of the income-tax act vid e  clause 41-   clause 74 seeks to amend section 35 of the wealth-tax act so as to omit the references to section 23a in clause (c) of sub-section (1)  clause 75 seeks to insert a new section 36 in the wealth-tax act to provide for production of evidence in prosecution for offences under the a rt   the provisions of the new section are on the same lines as those of new section 279b inserted in the income-tax act vide clause 53-   clatue 76 seeks to amend section 41 of the wealth-tax act relating to sei-vice of notice in view of levy of wealth-tax on companies, sub- sectioq (2) is proposed to be amended to clarify that in the case of com­panies the notice or requisition referred to in the sectton be addressed to the principal officer of such companies   a o w e  77 sedb to amend section 42a <rf tte  wealthrtax act relating to publication of infonnation reepectinitt view of levy of w ealth-tax on companies, the proposed expiana^f s e e k s  to clarify that :n the case of a company, the names of the directors, secretaries and treasurers, or managers of the company, may also be published if, in the opinion of the central government, the circumstances of the case justify itclause 78 seeks to insert a new schedule iii in the wealth-tax act to provide rules for determining value of assetsschedide iii ctmtains parts a to h :—1 p art a is of general nature- rule 1 in this part provides that the value of any asset, other than cash, for the purposes of the w ealth-tax act, shall be deter­mined in the manner laid down in nues 2 to 21-rule 2 lays down definitions of various terms appearing in these rules2 part b contains rules 3 to 8 which provide the manner in which the value of any immovable property, being a building or land aj^mirtenant thereto, or part thereof, is to be determined- 'the provisions of these rules are on the same lines as those «f the existing rule ibb in the w ealth-tax rules 1957, subject to the following modifications, namely; —    (i) these rules will be used for valuation of residential as well as commercial properties thus the word "house" wherever appears in rule ibb has been substituted by the words "immov­able property;     (ii) rules 3 provides that the value of any immovable pro­perty being a building or land appurtenant                                                       tliereto,                                                                  or part tiiereof, shall be the amo\mt arrived at by multiplpring the net maintainable rent by the figure 125 in all cases except where the property is constructed on leasehold land-    (iii) proviso to rule 3 provides that in the case of a property construct^ on a leasehold land the figure 12-5 mentioned above shall be substituted by the figure 10 if the unexpired period of the lease of such land is 50 years or more, and by the figure 8 if the unexpired period of the lease is less than 50 years-    it has further been provided that if the property is acquired cr constructed after the 31st day of march, 1974, then the value arrived at as per the aforesaid provision shall not be less than the cost of acquisition or the cost of construction as increa'^ed by the cost of any improvements in the properliy;    (iv) rule 4 deals with the method                                             of computing the "net maintainable rent" for the purpose of rule 3 this has amended suitably sub-rule 2(c) of the existing rule ibb under the am­ended provision the net maintainable rent is to be                                                            computed after deducting from the "gross maintainable rent" the amoimt of taxes levied h f any local authority in respect of property and a sum equal to 19 per cent- of the gross maintainable rent;    (v) rule 5 provides method of computing gross maintaia- able rent for the purpose of rule 4, this has amended the pro- visions of existing sub-rule (2) (a) of rule ibb                                                 in this rule gross maintainable rent means— ,    (a) where the property is let out the amount received or receivable by the owner as annual rent or annual value assessed by the local authority, whichever is higher;    (b) where the property is not let out, the amount of annual rent assessed by the local authority or if the property is not situaftd in the jurisdiction of any local authority, the amount which the owner can reascmably be expected to re­ceive as 4mnual rent      explanations to this rule define the words "the awnnai rent''   and "rent receivsd or receivable" in the case of a property let  out throughout the year the annual rent would mean the actual  rent received or receivable by the owner in that year if the pro- ' p®rty is let out for part of tiie year, the annual rent wlu be   determined proportionately-                               in cases where the land-lord re-  ceives a benefit from the tenant by way of municipal taxes borne  wholly or partly by the tenant, the "annual rent" will be in­ creased by the amount so borne by the tenant where the tenant  bears the expenditure on r^pairib ''the annual rent" shall be in  creased by one-ninth where the owner has accepted                                                            any  deposit (not being advance rent for a period of three months or  less) the annual rent shall be increased by 15 per' cent, of such  deposit per annum less the interest payable by the owner to the  tenant where the owner has recetved any amount by v/ay of  premium or otherwise for leasing tlie property the annual rent  will be increased by the amount obtained by dividing the ore-  n^vim by the number of years of the period of lease ''rent  received or receivpble" shall include all payments for the use of  a property by whatever name called, the value of all benefits or  perquisites, whether convertible into money or not,                                                       obtained  from the tenant or occupier by the owner;     (vi) rules 6 and t provide for adjustment to the value arrived at imder rule 3 for unbuilt area of plot of land, and adjustment for unearned increase in ths value of the land respectively these are on tiie lines of the existing sub-rules (3) and (4) of rule ibb                i    (vii)                 rule 8 mentions the cases where provisions of rule 3 are not +o applv provisions of this rule are on the lines of sub-rule (5) of the existing rule ibb except tfiat the requirement of having to obtam the prior aprrr»iral of the inspecting assistant commissioner in the matter of valuation in such cas« h ^  been dispensed «ath as a result of laying d o w  the guidelme in nue20                    '     3               part c contains rules 0 to 13 which provide the m ann« in which the value of shares in or debenture of companies are to bedetermined    (a) rule 9 provides for the valuation of quoted shares aad debentures of companies it provides that the value of a quoted equity or preference share in any company or a quoted deben­ture shall be taken as the value quoted in respect of such share or debenture on the valuation date, or where there is no such quotation on the valuation date, the quotation on the immedi' a td y  preceding date closest to the valuation date    (b) rule 10 provides for the valuation of unquoted prefer eice shares               ttie provisions of this rule are on the same lines as those of the existing rule 1c of the w ealth-tax rules, 1957 except that the words "market value" have been substituted by the word "value''    (c) rule 11 provides for the valuation of unquoted equity shares in companies other than investment companies the pro­visions of this rule are on the same lines as these of the existing rule id of the w ealth-tax rules, 1957 subject to the following modifications, nam ely;—      (t) the words "market value' is substituted by the word -\^ue";    (u) the value is determined in au cases at 80 per cent of the break-up value irrespective of the number of years for w hidi dividend has not been dedared    (d) rule 12 provides for the valuation of unquoted                                                         equity shares in investment companies                                  sub-rule (2) of this rule pro­vides the manner by which the value of sudi shares                                                       will bedetermined- the                    provisions of this sub-rule are on the same lines as in sub-rules (1) and (2) of tlie existing rule ie of the  w ealth-tax rules, 1957    sub-rule (3) clarifies that tlie value of an asset disclosed in the balance-sheet of the compaay shall be taken to be the value determined in accordance with the rules as applicable thereto and, in the absence of any such rule, the value of such asset shall be its value as determined under rule 20, i e, the price it would fetch in the open market if sold on the valuation date   sub-rule (4 ) clai ifies that the words "balance-sheet" in this r-tle shall have the same meaning as in rule 11, and the amaunta referred to in sub-rule (3) of rule 11 shall not be treated                                                            as assets these amounts are specified in explanation ii to the exis­ting rule id    for the purpose of facilitating the valuation under this rule, sub-rule (5) provides that the company concerned shall have such valuation made by its auditors appointed under section 224 of the companies act, 1956, and a certificate of the auditors re­lating to such valuation in the prescribed form shall be furnished to the assessing officer in the case of the company tt further pro\ide8 that the valuation made by the auditors shall be taken into account in the assessments of the shareboldefs of the com­pany                                                      •      (e)                  rule 13 provides for the valuation of unquoted equity snares m inter-locked companies explanation to this rule clari- fies that inter-locked companies in this rule mean any two in­vestment companies holding shares in each other    sub-rule (1) provides that the value of an unquoted eqxiity share in one of the two inter-locked companies held hy the other inter-locked company for the purposes of rule 12 shall be the higher of the paid-up value of such share or the value deter­mined under sub-rule (2)                                 ;   sub-rule (2) provides the mode of determining the value of such share which is mentioned below:(i) the value of equity share for this rule =aggregate value of all the equity sharesnumber cf equity shares                             ■ (ii) aggregate value of ail the equity shares shall be:    (a) in a case where 51 per cent, or more of the gross total income of the company consists                                         of the income chargeable under the head "income fiom house proporty", equal to the                maintainable profits of such                                                company x100is5    (b) in the case of any other inter-locked company, equal to maintainable profits x loojlo    (iii) sub-ixile (3) provides the manner in which the "maintainable profits" of the company for the above ptir- pose shall be computed   4 part d contains rule 14 which prowdes the manner in which the net value of the assets of the business as a whole, having regard to the balance-sheet of such business, is to be determined   sub-rule (2) provides the manner in which various adjustments are to be made in the value of assets and liabilities in the balance- sheet for the purpose of this rule    5 part e contains rules 15 and 16 which provide the manner in which the value of the interest of a person in a firm of which he is a partner or in an association of persons of which he is a member, is to be determined    rule 16 provides the computation of net wealth of the firm or an association of persons and its allocation amongst the partners or members the provisions of this rule are on the same lines as those of the existing sub-rule (1) of rule 2 of the wealth-tax rules, 1957a proviso has been added in rule 16 to provide that in deter­mining the net wealth for the purpose of this rule, no account shdl be taken of the exemptions in sub-sections (1) and (la) of section 5explanat^ to this rule seeks to provide that:(a) where the net wealth of the firm on association com­p u te d  in accokiance with this rule includes the value of anyassets located                  outside                           india, the value of the interest of an^ partner or member in the assets located in india shall be deter- iniiied iimving regard to ibe jjuoporuon                                              v\rbich                                                      uie                                                            value of a^ ets located in india diminished by the debts relating to those assets bcar^ to the net wealth of the firm os association these provisions are contained in the existing sub-rule (2) of rule 2 of the w ealth-tax rules 1957    (b) where the net wealth -of the firm or association, com­puted in aixordance with this rule includes the value of any assets which are exempt from inclusion in the net wealth under sub-sections (1) and (la) of section &, the value of the interest of a partner or m m b er shall be deemed t» include the value of his proportionate share in the said assets and, the provisions of sulvsections (1) and (la) of section 5 shall apply to                                                            him accordin^y;     (c) wliere the net wealth of the firm or association computed in accordance with this rule includes the value of any assets referred to in sub-section (2) of section                                                       5, the value of the interest of a partnex or member shall be deemed to include the value of his proportionate share in the said assets, and the pro­visions of sub-section (2) of section 5 siiau ai^ly to him accord­ingly          lliese pro^'isions are contained in existing sub-rule (3) of rule 2 of the w ealth-tax rules, 1957    6 part f contains rule 17 which provides the manner in which the value of life in t««st <sf an assessee is to be determined    the provisions of this rule are on the same lines as those of the existing ru le jb  of the w e\ith-tax rules, 19577 p art g contains rules 18 and 19 which provide the manner in which valuation of jewellery is to be determinedcunue (a) of rule 18 provides that in a case where the value of jewellery declared by the assessee is rs 5 lauis or less, the value declared will be acc^ted  provided infonnation in the prescribed form is furnished by the assesseeclause (b) of nile 18 provides that in a case where the value of jewellery declared is more than rs 5 lakhs, the valu­ation will be based on the value estimated by the valuation officer on a reference under section 16a of the w ealth-tax act   ruu' 19 pro'i'ic'; that the value of jewellery determined under clause (b) of rule 18 for any assc^ssment year (liereinafter referred to as the first assessment year) shall                                                be taken to be the value of such jewellery for the subsequent four assessment years subject to the adjustments proxnded                                            in clauses (a) and ( b ) : -     (a)                 where the jewellery includes gold or silver or any alloy containing gold or silver, the market value of such gold or silvc'- or such alloy on the valuation date relevant to the concerned subsequent assessment year shall be substitatedfor the market valixe of such gold or silver or alloy on th« valuation date relevant to the first assessment year;    (b) where any jewellery or part of jewellery is sold or otherwise diq>osed of by the assessee or any jewellery or part of jewellery is acquiaed by him, on oi- before the valu­ation date relevant to the concerned subsequent year^ the value of the jewellery determined for the post-assessment year shall be reduced or increased, as the case may be, and the value as so reduced or increased shall be the value of the jewellery for such subsequent assessment year    8            part h contains rules 20 and 21 which provide that the value of any asset, other than cash, being an asset which is not covered by rules 3 to 19 shall be estimated either by the assessing officer him­self or by the valuation officer if reference is made to him under sec­tion 16a' this rule farther provides that in both these cases, the value shall be estimated to be the pnce which it would fetch if sold iu the open market on the valuation date-                                                   sub-rule- (3) provides that in the case of assets not saleable in the open market, value shall be determined in accordance with guidelines or principles specified by the board from time to time by general or special order    rule 21 provides that for the purposes of determining market value under any provision of this schedule, the price or other consi­deration for which the property may be acquired by or transferred to any person under the terms of a deed of trusty or through or imder any restrictive covenant in any instrument                                               of transfer shall be ignored  clause 79 seeks to amend section 3 of the gift-tax act to make a consequential change so as to substitue the reference to "the schedule'' by "schedule i'' in view of renumbering of the existing schedule as schedule i                                                                     '  clause 80 seeks to amend section 5 of the gift-tax act by inserting clause (iiie) in sub-section (1)tlie new clause seeks to provide that gifts made by an indi\ddual •vdio is non-resident indian to any relative of any property in the form of bonds specified under sub<lause (iid) of clause (j5) of section 10 of the income-tax act shall be exempt from gift-taxthe proviso to the new clause seeks to provide that where an indivi­dual who is a non-resident indian in any previoiis year in which the bonds are acquired, becomes resident in any subsequent year, the clause shall apply in respect of the gifts of property in the form of such bonds made in such s u h ^ u e n t year or any year thereafterexplanation seeks to provide that for the purposes of this clause the expressions "relative" and "non-resident indian" shall have the meanings assigned to them in clause (41) of section 2 and clause (e) of section 115c of the income-tax actclansf 81 seeks to substitute a new section for section 6 of the gifttax act dealing with the mode of determination of the value of glftfc siib-section (1) of the new section provides that the value of any prc^>erty; other than cash, ti'ansferred by way of gifi shall, for the pur­ pose of this act, be its value as on the date on which the gift was made and shall be determined in the manner lai<j down in schedule ii sche­dule n  provides that the valuation is to be made in accordance with the proviaons of schedule iii to the w ealth-tax actsub-section (2) of the new section provides that in respect of a gift not revocable for a specified period, the value of property gifted shall be the capitalised value oi the income from such pi'operty during the period for which the gift is not re\'ocableclause 82 seeks to arneml section 10 of the gift-tax act [as substitut­ed hy section 164 of the direct tax laws (amendmeni) act, 1987] so as to substitute the reference to sub-section " (&)" occurring in sub-section(2) of that section by a reference to sub-section " (4) ''clause 83 seeks to amend section 15 of tlie giii-lax act [as subsl lu­ted b section 170 of the direct tax laws (amendment) act, 1987]the amendments proposed by sub-clauses (a) and (b) are on the lines of am endm oits made in section 143 of the income-tax act vide clause 21   sub-clause (c) seeks to amend sub-section (6) to provide that where u n d v  the provisions of section 6 read with new schedule ii, the fair m arket value of an property transferred by way of gift is to be taken into account in making an assessment, the assessing oflrcer may refer the valuation of such p r t^ r ty  to the valuation oflrcer                                                           the amend­ment is on the lines of section 16a of the w ealth-tax a ct    d o m e 84 seeks to amend sub-section (1) of section 16 of the gift- tax act relating t<» gift escaping as&essment   under the provisions of new sub-section (1) [as substituted by clausc(a) of section 171 of the direct tax laws (amendment) act, 1987], the assessing officer is empowered to assess or re-assess the taxable gift which has escaped assessment for any assessment year, after recording reasons for doing so   the proposed amendments in sub-section                                             (1) are on the lines of kirnilar amendments made in sections 147 and 148 of the incometax act vide clauses 23 and 24   clause 85 seeks to amend section 16b of the gift-taj; act [as in­serted by section 173 of the direct tax laws (amendment) act, 1987] on the same lines as amendments made in section 234a of the income- tax act vide clause 38   clause 86 seeks to amend section 17 of the gift-tax act on the same      as amwidments made in secti<m                                       271 of the income-tax act tnde clause 50   cuttue 87 seeks to substitute section 17a of the gift-tax act                                                                 [as it stood immediately before its substitution by section 174 of the direct tax laws (amendment) act, 1987] by a new section so as to make theprovisions of this section on tlie same lines as those of section 272a of the income-tax act [as substituted by section 110 of the direct t&x laws (amendment) act, 1587]clause 88 seeks to amend section 22 of the gift-tax act [as amend­ed by section 176 of the direct tax laws (amendmenl) act, 1m7] providing first appeal against the orders passed by the assessing officers amendment in sub-section (1), clause (d) is consequent to the amend­ment made in section 17 a m entoent in clause (c) of sub-section (la) pro'ddes appeal against the orders passed under sub-section (1) cf section 17 with the previous approval of the deputy commissioner as specified in sub-section (3) of that sectionclause 89 seeks to amend section 25 of the gift-tax act providing appeal to the appellate tribunal against the order passed by the director general or director under section 17aclause 90 seeks to amend section 33a of the gift-tax actthe amendmehts proposed by sub-clauses (a) and (b) are on the lines of amendments proposed in section 34a of the wealth-tax act vide clause 73clailse 91 seeks to amend section 34 of the gift-tax act so as to omit the references to scction 22a in clause (c) of sub-section (1)clause 92 seeks to insert a new section 35e in the gift-tax act to provide for production of evidence in prosecution for offences under the actthe provisions of the new section are on the same lines as those ctf new section 279b inserted in the income-tax act vide clause 53    clause 93 seeks to amend section 45 of the gift-tax act mentioning certain cases in which the provisions of the gift-tax act are not applied the amendment seeks to substitute a new expla;iation for explanations1 and 2 [as they stood immediately before their substitution by section 184 of the direct tax laws (amendment) act, 1987] so as to clarify that for the purpose of clause (b) the term "amalgamation" shall have the             assigied to it in clause (ib) of swtion 2 of the tncotne-taxact    clr:'vf 94 seeks to amend the gift-tax act by inserting schedltls it ^ 'hich inc-orncra^es th? rules for determininp the value of the property gifted    schedule ii provides that the value of any property other than cadi transferred by way of gift shall be determined, for the purpose of this act, in accordance with the provisions of schedule hi of the wealth-tax ^ct subject 10 the following modifications—    (a) in rule 5 of schedule hi to the wealth-tax act, referenceto the vear ending on the valuation date shall be construed as areference to the previous year except this, reference to the valua­tion dfite shp1l be ponst'-'i<-h as reference tr the date on which                                                               thegift was made(b) references to sections 7 and 16a of the wealth-tax act be construed as references to section 6 and sub-section (6) o£ section 15 of this actclause 95 seeks to omit or amend various provisiors of the direct tax laws (amendment) act 1987itie clause seeks to omit clauses (p) and (s) of section 3, clauses (a), (k) and (1) of section 6, sections 7, 8 clause (a) of section 9, clause (11) of section 13, 16, 17, 18, 19, 20, 21, 24, clauses (a), (b), (d) ' and (e) of section 25, 26, 29, clause (a) of section 61, 62 63; clause (a) of section 64, 66, 67, 68, 69, 71, 72, clause (b) of section 88, 100, 101, 106, 122, clause(3) sulmdause (i) of clause (5), dauses («), (8), (9), (10), (11), (18), (14) (16), (is) and (22) of section 124 clauses (5) (8), (11), (13) (23) and (28) of section 126, secuons 142,' 148, 144, 147, clauses (1) and (2) of section 160, 174 17s, 177, clauses (c) and (d) of section 184 and clause (2 ) of section 186the clause also seeks to ameiul clause (r) of section 3, section 18, clfliise (c) of section 61, clause (b) of section 64, clauses (12) and (24) of section 124, clause (a) of section 149 and clause (a) of scction 179   the pi-oposed amendments in various provisions of the direct tax haws (amendment) act, 1967 will mainly h£ve the                                                      following                                                                 effect, namely: —    (i) to- withdiaw the amendments made in the income-tax act for introducing a new scheme of assessment of firms and partners and to restore the d d  provisions in this regard which existed imme­diately before their amendment by the direct tax laws (amend­ment) act, 1987;    (ii) to withdraw the amendment made in clause (ii) of sub­section (1) of section 64 of the income-tax act restricting the in­applicability of that clause to professional firms only and to revive the old provisions of that clause as they existed immediately before the amendment by the direct tax laws (amendment) act, 1987;    (iii) to withdraw ''e                              amendments made                                                    in                                                        the income-tax act for introducing a new scheme of assessment of charitable or religious trusts, institutions or funds and to restore the old provi­sions in this regard and also the provisions of sections 35, 35cca and 35ccb relating to the deductions on account of scientific re­search, rural development programmes and pr«»grammes of conser­vation of natural resources which existed immediately before their amendment by the direct tax i^w s (amendment) act, 1987;    (iv) to withdt-aw the provisions relating? to levj- of additional income-tax,              wealth-tax                           and gift-tax and advance ruling in the income-tax act, wealth-tax act and gift-tax act and to restore the old penal provisions in this regard in the said acts which existed immediately before their                             amendment                                           by the                                                    direct tax                                                                 laws (amendment) act, 1987;    (v) to substitute the words "assessing officer'' for the v/ords "income-tax officer" <m account of tbe changes in the designations made by tbe direct tax laws (amendment) act, 1987 with effect from 1-4-1988 in the second and third schedules of the income-tax act memorandum rex3arding delegated legislation                                                                                      v     clause 4 of the bui seeks to amend section 10 of the income-tax act sub-clause (a) of clause 4 seeks to insert clause (6c) which empowers the centra] government to specify a foreign company whose income, by way of fees for technical services received in pursuance of an agreement with the central govenunent for providing services in projects connected with security of india, will be exempt sub-clause (b) -seeks to insert sub-clause (ild) in clause (15)                                                            the new sub-clause                                                                                                   empowers the central government to specify bonds which are purchased by a non­resident indian in foreign exchange, the interest whereon arising to a non-resident                         indian, etc, will be exempt                                                                                sub-clause                                                                                                      (d)                                                                                                               seeks to substitute a new clause for clause (23) the new clause empowers the central government to notify an associaition or institution which has as, its object the control, supervision, regulation or encouragement in india of the games of cricket, hockej" football, tennis or such other games as the central government may specify-                                                                       the income of such association or institution will, on such notification being issued, be exempted the form in which the association has to make an application and the authority to whom the application is to be made w'ill be prescribed by rules clause (b) of the third proviso to clause (23) also empowers the central board of direct taxes to notify certain articles received in the form of voluntary contribution which need not be invested or deposited under that clause clause (e) seeks to amend clause (23c)                                                                                                            so as to substitute new sub-clauses for sub-clauses (iv) and (v) new sub-clause  (iv) empowers the central government to notify any fund or institution established for charitable purposes which has importance                                                                                                           throughout india or throughout any state or states and                                                                                        new sub-clause                                                                                                                       (v) empowers the central government to notify                                                                                   any trust or institution eetablished wholly for public religious purposes or wholly for public religious and charitable purposes                                                              the income received by any person on behalf of the said fund, institution or trust will stand exempted on such notification being issued under the first proviso to the said sub­clauses the form of application and the authority to which application is to be made are required to be prescribed by rules      2 qause 5 of the bill seeks to amend section 11 of the income-tax act sub-clause (b) (ii) seeks to insert clause (xii)                                                                                       in sub-section (5)                                                                                                                         of section 11 which enables the central government to prescribe any other form or m«;de of investment or deposit by rules made in this behalf     3 clause 6 of the bill seeks to amend section 32a of the income-tax act            sub-clause (f) proposes to «vbstitute new sub-sections for sub­ section (8b) 'new  sub-section (8b) empowers the central government to specify a date after which the provisions of section 32a shall cease to apply in respect of a ship or aircraft acquired or any machinery or plant instiled      4 clause 8 of the bill seeks to amend section 35 of the income-tax act sub-clause (c) proposes to insert three provisos in sub-section (1) of section 35 undei the first proviso the form of application and theauthority to which the application shall be made by the scientific re­ search association, university, college or other institution are required to be prescribed by rules5 clause 14 of the bill seeks to insert a ne v sub-clause (iii) in clause(a) of sub-section (3) of section 805cc of tne income-tax act under the said sub-clause the authority by which a hotel is to be approved is requii-ed to be prescribed by rules   6 clause 16 of the bill seeks to insert a new section 80hhd in the income-tax act                     under the provisions of sub-section (1) and clause (a) of sub-section (4) of the said section, the authority by which hotels are to be approved, is to be prescribed by rules                                                      under clause (e) of sub­section (4), tiie central government is empowered to specify by noti­fication new facilities for the growth of indian tourism for the purposes 'j[ section 80hhd   7 clause 20 of the bill seeks to amend section 139 of the income-tax act       sub-clause (a) seelcs to substitute a new sub-section for sul>- section (4a) under new sub-section ( ^ ) ,  the form in wliich return of income is to be made, the manner in which the return is to be verified and certain other particulars to be included in the return are required to t»e prescribed by rules   8 clause 34 of the bill seeks to amend section 206c of the income-tax act sub-clause (b) proposes to insert a new sia>-section (5a) under tha said sub-section                     tlie form in which half-yearly                                                           returns are                                                                           to                                                                                be delivered, the income-tax authority t«» which                                                       such returns are to                                                                                be delivered, the manner of verification of such returns and the time within which such returns are to be delivered are required to be prescribed by rules  9 clause 56 of the bill seeks to amend the tenth schedule to the income-tax act sub-clause (ii) (a) proposes to insert two new provisos after the existing provlo in rule 3 under the new third proviso, the central board of direct taxes has power to make rules so as to increase the amount or amounts specified in column (2) of the table tmder rule3 to such extent and in such manner as may be                                                   prescribed - in                                                                  the rule^ having regard to the factors specified in the said proviso   10 clause 78 of the bill seeks to insert a new schedule iii in the w ealth-tax act laying down rules for determining the value of assets the explanation tc sub-rule (9) of rule 2 of the said schedule requires the form of certificate to be furnished by the stock exchange to be pres­cribed by rules sub-rale (3) of rule 20 of the said schedule empoweis the central board of direct taxes to specify guidelines or principles by general or special order for determining the value of any asset where the value of any such asset cannot be estimated under r^ e  20 because the same is not saleable in the open market   11 the matters in respect of which the notifications may be issued by the central government or the central board of direct taxes or in respect of which the rules may be made by the central board of direct taxes under section 295 of the incoitie-tax act and section 46 of the w ealth-tax act are matters of administrative details and it is not possi­ble to include them in the bill under the circumstances the delegation of legislative power is, therefore, of a normal charac^rarittfurther to amend the income-tax act, 1961, the wealth-tax act, 1957, the gift-tax act, 1958 and the direct tax laws (amendment) act, 1987(s m  s b chavan, minutter of tiwnst)