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Corporate Tax Planning

Notes 2. The undertaking and the Industrial Park should be notified by the Central Government

under the Industrial Park Scheme, 2008.

3. The undertaking should continue to fulfil the conditions envisaged in the Industrial
Park Scheme, 2008.
(iii) However, where an undertaking develops an industrial park on or after 1.4.1999 or a
special economic zone on or after 1.4.2001 and transfers the operation and maintenance to
another undertaking (transferee undertaking), the deduction to the transferee undertaking
shall be available for the remaining period in the ten consecutive assessment years, in such
a manner as would have been available to the transferor undertaking, as if the operation
and maintenance were not so transferred to the transferee undertaking.

Power Undertakings

Any undertaking which
(i) is set up in any part of India for the generation or generation and distribution of power.
However, such undertaking must begin to generate power at any time during the period
between 1.4.1993 and 31.3.2013.;
(ii) starts transmission or distribution by laying a network of new transmission or distribution
lines at any time during the period from 1.4.1999 and 31.3.2013. However, the deduction

shall be allowed only in respect of profits derived from the laying of such network of new
lines for transmission or distribution.;
(iii) undertakes substantial renovation and modernisation of the existing network of
transmission or distribution lines at any time during the period beginning on 1.4.2004 and
ending on 31.3.2013.;

Substantial renovation and modernisation means an increase in the plant and machinery in the
network of transmission or distribution lines by at least fifty per cent of the book value of such

plant and machinery as on 1st April, 2004.
Telecom and Power undertakings should fulfil the following conditions:

(a) It is not formed by splitting up or reconstruction of a business already in existence. However,
this condition shall not apply in the case of an undertaking which is formed as a result of
reconstruction, re-establishment or revival of the business of any undertaking which has
been discontinued in any previous year due to extensive damage or destruction of any
building, machinery, plant or furniture owned by the assessee and used for the purposes of
such business. Further, the reason for damage or destruction is due to any natural calamity
or other unforeseen circumstances such as the following:

(i) Flood, typhoon, hurricane, cyclone, earthquake or other natural calamity, or
(ii) riot or civil disturbance, or

(iii) accidental fire or explosion, or
(iv) enemy action or action taken in combat, and such business is re-established or
revived within 3 years from the end of such previous year.
(b) The undertaking should not be formed by the transfer of machinery or plant previously
used for any purpose.
However, these conditions do not apply in case of transfer, either in whole or in part, of
machinery or plant previously used by a State Electricity Board. This is irrespective of
whether or not such transfer is in pursuance of the splitting up or reconstruction of such
State Electricity Board or reorganisation of the State Electricity Board under Part XIII of the
Electricity Act, 2003.

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