Attribution of income taxable under section 67(10) to capital assets remaining with the specified entity, under section 72

Attribution of income taxable under section 67(10) to capital assets remaining with the specified entity, under section 72.

50. (1) For the purposes of section 72(5), the amount chargeable to income-tax as income of specified entity under section 67(10), shall be attributed to capital asset remaining with the specified entity in the manner provided in this rule.

(2) Where the aggregate of the value of money and the fair market value of the capital asset received by the specified person from the specified entity, in excess of balance in his capital account, chargeable to tax under section 67(10) relates to revaluation of any capital asset or valuation of self-generated asset or self-generated goodwill, of the specified entity, the amount attributable to the capital asset remaining with the specified entity for purpose of section 72(5) shall be—

A= B×(C/D).

Where,—

A= the amount attributable to the capital asset remaining with the specified entity for purpose of section 72(5);

B= amount charged under section 67(10);

C= increase in, or recognition of, value of the asset remaining with the specified entity, because of revaluation or valuation; and

D= aggregate of increase in, or recognition of, value of all assets because of the revaluation or valuation.

(3) Where the aggregate of the value of money and the fair market value of the capital asset received by the specified person from the specified entity, is in excess of the balance in his capital account, charged to tax under section 67(10) does not relates to revaluation of any capital asset or valuation of self-generated asset or self-generated goodwill, of the specified entity, the amount charged to tax under section 67(10) shall not be attributed to any capital asset for the purposes of section 72(5).

(4) Irrespective of anything contained in sub-rule (2) or sub-rule (3), where the aggregate of the value of money and the fair market value of the capital asset received by the specified person from the specified entity, in excess of balance in his capital account, charged to tax under section 67(10) relate only to the capital asset received by the specified person from the specified entity, the amount charged to tax under section 67(10) shall not be attributed to any capital asset for the purposes of section 72(5).

(5) The specified entity shall furnish the details of amount attributed to capital asset remaining with the specified entity in Form No. 27.

(6) The person who is authorised to verify the return of income of the specified entity under section 265 shall verify Form No. 27.

(7) Form No. 27 shall be furnished on or before the due date referred to in section 263(1)(c) for the tax year in which the amount is chargeable to tax under section 67(10).

(8) For the purposes of this rule,—

(a) the amount chargeable to tax under section 67(10) shall relate to revaluation of any capital asset or valuation of self-generated asset or self-generated goodwill, of the specified entity, if the revaluation is based on a valuation report obtained from a registered valuer as defined in rule 56(f);

(b) the specified entity shall not be entitled for the depreciation on—

(i) the increase in value of an asset on account of its revaluation; or

(ii) the recognition of the value of a self-generated asset or self-generated goodwill, due to its valuation; and

(c) the expressions "self-generated asset" and "self-generated goodwill" shall have the meanings respectively assigned to them in section 67(11)(b).