16. The following new section is hereby inserted, immediately after section 31 and shall have effect as section 31 A of the principal enactment :
| 31A.
| | (1) Subject to the succeeding provisions of this section, there shall be deducted, for the purposes of section 30, an allowance (hereinafter in this section referred to as the "investment tax allowance") from the assessable income of any person for any year of assessment, in respect of every qualifying investment referred to in subsection (2) made or deemed to have been made by such person in that year of assessment. | | |
| | (2) For the purposes of subsection (1)
| | | (a) "qualifying investment" in relation to any person and to any year of assessment means any sum expended by such person -
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| (b) where any capital asset acquired by any person (being a capital asset comprised in any qualifying investment made by such person) is put to use in any undertaking referred to in sub-paragraph (ii) of paragraph (a), not later than three hundred and sixty five days after the date of acquisition of such capital asset, the qualifying investment in relation to such capital asset shall be deemed to have been made in the year of assessment in which such date of acquisition occurs. |
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| | (3) Where the qualifying investment is
| | | (i) an amount not less than two hundred and fifty million rupees, or is made in any undertaking located outside the limits of all the Municipal Councils situated within the administrative district of Colombo the investment tax allowance in respect of that investment shall be an amount equal to the entirety of that investment; and |
| (ii) an amount less than two hundred and fifty million rupees and is made in any undertaking located within the limits of any Municipal Council situated within the administrative district of Colombo the investment tax allowance in respect of such investment shall be an amount equal to seventy-five per centum of such investment. |
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| | (4) The deduction, from the assessable income of any person for the year of assessment in which any qualifying investment is made, of the investment tax allowance in relation to that qualifying investment shall
| | | (i) where such qualifying investment is any qualifying investment referred to in paragraph (i) of subsection (3), be an amount equal to seventy five per centum of such assessable income, or the entirety of such investment whichever is less, |
| (ii) where such qualifying investment is any qualifying investment referred to in paragraph (ii) of subsection (3), be an amount equal to fifty per centum of such assessable income, or the entirety of such investment whichever is less. |
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| | (5) The balance, if any, of any investment tax allowance after its deduction, in accordance with subsection (4), shall be carried forward to the year of assessment immediately succeeding that year of assessment, and such balance so carried forward shall be deemed to be the investment tax allowance for such succeeding year of assessment, and so on, until the full amount of the investment tax allowance is deducted. | | |
| | (6) The provisions of this section shall, not apply in relation to the amount invested in the acquisition of any capital asset
| | | (i) in respect of which the entitlement, if any, to any rebate or waiver of customs duty in terms of the incentive scheme approved by the Government for the utilization of advanced technology, has been availed of ;or |
| (ii) if such asset is used or is to be used, in any undertaking referred to in sub-paragraph (ii) of paragraph (a) of subsection (2), the whole, or any part of the profits and income (within the meaning of paragraph (a) of section 3) of which, for any period during the period commencing on November 6, 1996 and ending on March 31, 1999, is entitled to any exemption from income tax ; or |
| (iii) if such capital asset is disposed of before the expiry of three years reckoned from the date of acquisition of such capital asset. |
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| | (7) Where an investment tax allowance has been deducted from the assessable income of any person, in relation to any capital asset
| | | (a) which is not used, in any undertaking referred to in sub-paragraph (ii) of paragraph (a) of subsection (2) before the expiry of three hundred and sixty five days after the date of acquisition of such capital asset; or |
| (b) referred to in subsection (6), |
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| | (8) For the purposes of this section
| | | (a) the expression "provision of any specified service" means
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| (b) the expression "date of acquisition" in relation to any capital asset and to any person means the date on which such capital asset is acquired by such person, or such other date as may be accepted as the date of acquisition by the Commissioner-General having regard to any documentary evidence adduced before him, relating to the arrangements made by such person for the acquisition of such asset; |
| (c) the term "disposal" in relation to any capital asset, has the same meaning assigned to it in section 23 (7); |
| (d) the term "new" in relation to any capital asset means any capital asset which is proved to the satisfaction of the Commissioner- General by documentary evidence not to have been used in Sri Lanka prior to the date of acquisition of such capital asset; |
| (e) "capital asset" means any plant, machinery or equipment other than any building, fixture, fitting, utensil or any motor vehicle ; |
| (f) "allowance for depreciation" has the same meaning assigned to it in section 23 (7); |
| (g) "motor vehicle" means any mechanically propelled vehicle not being a motor ambulance, lorry, tractor, hand tractor, trailer or a motor coach constructed for the carriage of not less than thirty persons ; |
| (h) "hospital services" means the services authorised to be provided by an institution registered under the Nursing Home Regulation Act (Chapter 220) for indoor patients. |
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Sri Lanka Consolidated Acts