Income Tax Act, 1967.

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Traders other than dealers in securities.

370.—(1) If the first buyer carries on a trade not falling within section 368 then, in ascertaining whether any, and, if so, what, repayment of tax is to be made to him under section 307 by reference to any loss sustained in the trade for the year of assessment his income for which includes the interest, there shall be left out of account—

(a) the appropriate amount in respect of the interest, as determined in accordance with Schedule 11, and

(b) any tax paid on that amount.

(2) Where the first buyer is a company and carries on a trade not falling within section 368 or a business consisting mainly in the making of investments then, if any annual payment payable by the company is to any extent payable out of the interest, that annual payment shall be deemed to that extent not to be payable out of profits or gains brought into charge to tax, and section 434 shall apply accordingly.

(3) In this section “company” includes any body corporate.