Section 33AB:
Tea development account, coffee development account and rubber development account.
1 ,2(1) Where an assessee carrying on business of 3
growing and manufacturing tea or coffee or
rubber in India has, before the expiry of six months from the end of the previous year or before 4
the due
date of furnishing the return of his income, 5
whichever is earlier,
(a) deposited with the National Bank any amount or amounts in an account (hereafter in this
section referred to as the special account) maintained by the assessee with that Bank in accordance
with, and for the purposes specified in, a scheme (hereafter in this section referred to as the scheme)
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approved in this behalf by the Tea Board or the Coffee Board or the Rubber Board; or
(b) 7
deposited any amount in an account (hereafter in this section referred to as the Deposit
Account) opened by the assessee in accordance with, and for the purposes specified in, a scheme
framed by the Tea Board or the Coffee Board or the Rubber Board, as the case may be (hereafter in
this section referred to as the deposit scheme), with the previous approval of the Central
Government,
the assessee shall, subject to the provisions of this section, be allowed a deduction (such deduction being
allowed before the loss, if any, brought forward from earlier years is set off under section 72 ) of
(a) a sum equal to the amount or the aggregate of the amounts so deposited; or
(b) 8
a sum equal to forty per cent.. of the profits of such business (computed under the head
Profits and gains of business or profession before making any deduction under this section),
whichever is less:
Provided that where such assessee is a firm, or any association of persons or any body of individuals,
the deduction under this section shall not be allowed in the computation of the income of any partner, or
as the case may be, any member of such firm, association of persons or body of individuals:
Provided further that where any deduction, in respect of any amount deposited in the special account
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, or in the 10Deposit Account, has been allowed under this sub-section in any previous year, no
deduction shall be allowed in respect of such amount in any other previous year.
(2) The deduction under sub-section (1) shall not be admissible unless the accounts of such business
of the assessee for the previous year relevant to the assessment year for which the deduction is claimed
have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288
and the assessee furnishes, along with his return of income, the report of such audit in the prescribed
formduly signed and verified by such accountant:
Provided that in a case where the assessee is required by or under any other law to get his accounts
audited, it shall be sufficient compliance with the provisions of this sub-section if such assessee gets the
accounts of such business audited under such law and furnishes the report of the audit as required under
such other law and a further report in the form prescribed under this sub-section.
(3) Any amount standing to the credit of the assessee in 11
the special account or the 12
Deposit
Account shall not be allowed to be withdrawn except for the purposes specified in the scheme or, as the
case may be, in the deposit scheme or in the circumstances specified below:
(a) closure of business;
(b) death of an assessee;
(c) partition of a Hindu undivided family;
(d) dissolution of a firm;
(e) liquidation of a company.
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(4) Notwithstanding anything contained in sub-section (3), where any amount standing to the credit
of the assessee in the special account or in the Deposit Account is released during any previous year by
the National Bank or withdrawn by the assessee from the Deposit Account, and such amount is utilised
for the purchase of
(a) any machinery or plant to be installed in any office premises or residential accommodation,
including any accommodation in the nature of a guest-house;
(b) any office appliances (not being computers);
(c) any machinery or plant, the whole of the actual cost of which is allowed as a deduction
(whether by way of depreciation or otherwise) in computing the income chargeable under the head
Profits and gains of business or profession of any one previous year;
(d) any new machinery or plant to be installed in an industrial undertaking for the purposes of
business of construction, manufacture or production of any article or thing specified in the list in the
Eleventh Schedule,
the whole of such amount so utilised shall be deemed to be the profits and gains of business of that
previous year and shall accordingly be chargeable to income-tax as the income of that previous year.
(5) Where any amount, standing to the credit of the assessee in the special account 4
or in the
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Deposit Account, is withdrawn during any previous year by the assessee in the circumstance specified
in clause (a) or clause (d) of sub-section (3), the whole of such amount shall be deemed to be the profits
and gains of business or profession of that previous year and shall accordingly be chargeable to incometax as the income of that previous year, as if the business had not closed or, as the case may be, the firm
had not been dissolved.
(6) Where any amount standing to the credit of the assessee in the special account 4
or in the
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Deposit Account is utilised by the assessee for the purposes of any expenditure in connection with
such business in accordance with the scheme 14
or the deposit scheme, such expenditure shall not be
allowed in computing the income chargeable under the head Profits and gains of business or profession.
(7) Where any amount, standing to the credit of the assessee in the special account 14
or in the
12
Deposit Account, which is released during any previous year by the National Bank 14
or which is
withdrawn by the assessee from the 12
Deposit Accountfor being utilised by the assessee for the purposes
of such business in accordance with the scheme 14
or the deposit scheme is not so utilised, either wholly
or in part, within that previous year, the whole of such amount or, as the case may be, part thereof which
is not so utilised shall be deemed to be profits and gains of business and accordingly chargeable to
income-tax as the income of that previous year:
Provided that this sub-section shall not apply in a case where such amount is released during any
previous year at the closure of the account in circumstances specified in clauses (b), (c) and (e) of
sub-section (3).
(8) Where any asset acquired in accordance with the scheme 15
or the deposit scheme is sold or
otherwise transferred in any previous year by the assessee to any person at any time before the expiry of
eight years from the end of the previous year in which it was acquired, such part of the cost of such asset
as is relatable to the deduction allowed under sub-section (1) shall be deemed to be the profits and gains
of business or profession of the previous year in which the asset is sold or otherwise transferred and shall
accordingly be chargeable to income-tax as the income of that previous year:
Provided that nothing in this sub-section shall apply—
(i) where the asset is sold or otherwise transferred by the assessee to Government, a local
authority, a corporation established by or under a Central, State or Provincial Act or a Government
company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or
(ii) where the sale or transfer of the asset is made in connection with the succession of a firm by a
company in the business or profession carried on by the firm as a result of which the firm sells or
otherwise transfers to the company any asset and the scheme 15
or the deposit scheme continues to
apply to the company in the manner applicable to the firm.
Explanation.—The provisions of clause (ii) of the proviso shall apply only where—
(i) all the properties of the firm relating to the business or profession immediately before the
succession become the properties of the company;
(ii) all the liabilities of the firm relating to the business or profession immediately before the
succession become the liabilities of the company ; and
(iii) all the shareholders of the company were partners of the firm immediately before the
succession.
(9) The Central Government, if it considers necessary or expedient so to do, may, by notification in
the Official Gazette, direct that the deduction allowable under this section shall not be allowed after such
date as may be specified therein.
Explanation.—In this section,—
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(a) “Coffee Board” means the Coffee Board constituted under section 4 of the Coffee
Act, 1942 (7 of 1942);
(aa) “National Bank” means the National Bank for Agriculture and Rural Development
established under section 3 of the National Bank for Agriculture and Rural Development
Act, 1981 (61 of 1981);
(ab) “Rubber Board” means the Rubber Board constituted under sub-section (1) of section 4 of
the Rubber Act, 1947 (24 of 1947);
(b) “Tea Board” means the Tea Board established under section 4 of the Tea Act, 1953
(29 of 1953).
Notes:
1. Subs. by Act 12 of 1990, s. 10, for section 33AB (w.e.f. 1-4-1991).
2. Ins. by Act 32 of 2003, s. 16 (w.e.f. 1-4-2004).
3. Subs. by s. 16, ibid., for growing and manufacturing tea (w.e.f. 1-4-2004).
4. Subs. by s. 16, ibid., for furnishing the return of his income (w.e.f. 1-4-2004).
5. Subs. by Act 32 of 1994, s. 12, for certain words (w.e.f. 1-4-1995).
6. Subs. by Act 32 of 2003, s. 16, for approved in this behalf by the Tea Board (w.e.f. 1-4-2004).
7. Subs. by s. 16, ibid., for certain words (w.e.f. 1-4-2004).
8. Subs.by Act 14 of 2001, s. 22, for a sum equal to twenty per cent. of the profits (w.e.f. 1-4-2002).
9. Ins. by Act 32 of 1994, s. 12 (w.e.f. 1-4-1995).
10. Subs. by Act 32 of 2003, s. 16, for Tea Deposit Account (w.e.f. 1-4-2004).
11. Subs. by Act 32 of 1994, s. 12, for the special account shall not be allowed to be withdrawn except for the purposes
specified in the scheme (w.e.f. 1-4-1995).
12. Subs. by Act 32 of 2003, s. 16, for Tea Deposit Account (w.e.f. 1-4-2004).
13. Subs. by s. 16, ibid., for sub-section (4) (w.e.f. 1-4-2004).
14. Ins. by Act 32 of 1994, s. 12 (w.e.f. 1-4-1995).
15. Ins. by Act 32 of 1994, s. 12 (w.e.f. 1-4-1995).
16. Subs. by Act 32 of 2003, s. 16, for clause (a) (w.e.f. 1-4-2004).