Income Tax Act, 1967.

Chapter II

Industrial Buildings and Structures: Industrial Building Allowance

Industrial building allowance.

254.—(1) Subject to the provisions of this Act, where a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade carried on by him, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance (in this Chapter referred to as an industrial building allowance) equal to one-tenth of the expenditure, and such allowance shall be made as a deduction in charging the profits or gains of the trade:

Provided that this subsection shall not apply to any expenditure incurred before the 30th day of September, 1956.

(2) Notwithstanding anything in subsection (1), in relation to capital expenditure incurred on or after the 14th day of December, 1961, and before the 1st day of April, 1968, this Chapter shall have effect as if “one-fifth” were substituted for “one-tenth” in subsection (1):

Provided that this subsection shall not have effect in relation to capital expenditure incurred on or after the 1st day of January, 1960, on the construction of a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping or in relation to capital expenditure incurred on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by virtue of section 255 (1) (c).

(3) Notwithstanding any other provision of this section, no industrial building allowance shall be made in respect of any expenditure on a building or structure if the building or structure, when it comes to be used, is not an industrial building or structure, and where an industrial building allowance has been granted in respect of any expenditure on any such building or structure, any necessary additional assessments may be made to give effect to this subsection.

(4) For the purposes of this section—

(a) any expenditure incurred for the purposes of a trade by a person about to carry it on shall be treated as if it had been incurred by that person on the first day on which he does carry it on, and

(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority:

Provided that paragraph (a) shall not apply to any expenditure incurred before the 30th day of September, 1956.

(5) Section 241 (3) shall apply in relation to a deduction under this section as it applies in relation to a deduction allowable in respect of wear and tear of machinery or plant.

(6) Any claim by a person for an allowance under this section in charging the profits or gains of his trade shall be included in the annual statement required to be delivered under this Act of the profits or gains thereof and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the construction of an industrial building or structure and giving such particulars as show that the allowance falls to be made.