Income Tax Act, 1967.

Option to treat as creating or augmenting loss.

318.—(1) Subject to the provisions of this Chapter, any claim made under section 307, for relief in respect of a loss sustained in any trade, may require the amount of the loss to be determined as if an amount equal to the capital allowances for the year of assessment for which the year of claim is the basis year were to be deducted in computing the profits or gains or losses of the trade in the year of claim and a claim may be so made notwithstanding that apart from those allowances a loss has not been sustained in the trade in the year of claim.

(2) Where on any claim made by virtue of this Chapter relief is not given under section 307 for the full amount of the loss determined as aforesaid, the relief shall be referred as far as may be to the loss sustained in the trade rather than to the capital allowances in respect of the trade.