THE FIFTH SCHEDULE
COMPUTATION OF PROFITS AND GAINS FROM THE EXPLORATION AND EXTRACTION
OF MINERAL DEPOSITS (OTHER THAN OIL AND OIL GAS) IN
[See section 28(2) (c)]
1. Profits from exploration and extraction of mineral deposits to be computed separately.–
Where any person carries on the business of the exploration or extraction of mineral deposits of a wasting nature other than oil and oil gas in Bangladesh, the profits and gains of such business, shall be computed separately from his income, profits or gains from other business, if any, and such business shall, for the purposes of these paragraphs, be treated as a separate undertaking (hereinafter referred to as such undertaking).
2. Computation of profits.-
(1) Subject to the provisions of this Part, the profits and gains of such undertaking shall be computed in accordance with the provisions of section 29.
(2) All expenditure on prospecting and exploration incurred by such undertaking up to the stage of commercial production shall, to the extent it cannot be set off against any other income of the said undertaking or any other income in accordance with section 37, be treated as a loss.
(3) The loss computed in the manner specified in sub-paragraph (2) shall be set off against the income of such undertaking after the commencement of commercial production so, however, that if it cannot be wholly set off against the income, profits or gains of the said undertaking for the income year in which the commercial production was commenced, the portion not so set off shall be carried forward to the following year, and so on; but no loss shall be carried forward for more than ten years beginning with the year in which commercial production was commenced.
(4) Notwithstanding the provisions of paragraph 3 and 6 of the Third Schedule, after the commencement of commercial production, depreciation allowance in respect of machinery and plant purchased or acquired for extracting the ore shall be allowed as a deduction against profits and gains of the year in which they are used for the first time in an amount equal to the original cost of such asset; where such allowance cannot be made in full in any year owing to there being no profits or gains chargeable for that year or owing to the profits and gains so chargeable being less than the allowance, the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of allowance for depreciation for the following year and deemed to be part of that allowance or, if there is no allowance for that year, be deemed to be allowance for that year, and so on for succeeding year :
Provided that where any loss has also to be carried forward under sub-paragraph (3) effect shall be given to that paragraph.
3. Depletion allowance.-
(1) In computing the profits and gains of such undertaking for any year, an additional allowance (hereinafter referred to as the depletion allowance) shall be made equal to 15 per cent. of the total income of such undertaking (before the deduction of such allowance) or 50 per cent. of the capital employed in such undertaking (such capital being computed in accordance with such provisions as may be made by the Board for the purpose of this paragraph), whichever is the less.
(2) No deduction on account of the depletion allowance shall be allowed under sub-paragraph (1) unless an amount equal to the depletion allowance is debited to the profit and loss account of the relevant income year and credited to a reserve account to be utilised for the development and expansion of such undertaking.
(3) Where an allowance by way of depletion allowance has been made in any year and subsequently it is utilised for a purpose not specified in sub-paragraph (2), the amount originally allowed shall be deemed to have been wrongly allowed and the Deputy Commissioner of Taxes may, notwithstanding anything contained in this Ordinance, recompute the total income of the assessee for the relevant income year and the provisions of sections 93 and 94 shall, so far as may be, apply thereto, the period of 1[limitation] specified in section 94 being reckoned from the end of the income year in which the amount was so utilised.
4. Tax exemption of profits from refining or concentrating mineral deposits.-
(1) Where such undertaking is also engaged in the business of refining or concentrating in Bangladesh the mineral deposits extracted by it in Bangladesh, so much of the profits and gains (hereinafter referred to in subparagraph (2) as the said amount of profit and gains) derived from such business as does not exceed five percent of the capital employed in such business, such capital being computed in accordance with such rules as may be made by the Board for the purposes of this paragraph, shall be exempt from tax.
(2) Where the profits and gains of such business, computed for any year of assessment cover a period which is less or more than one year, the amount of profits and gains exempt under sub-paragraph (1) shall be the amount which bears the same proportion to the said amount of profits and gains at the same proportion as the said period bears to a period of one year.
(3) The profits and gains of the business to which this paragraph applies shall be computed in accordance with the provisions of sections 28 and 29.
(4) Nothing contained in this paragraph shall apply to an undertaking which is formed by the splitting up, or the reconstruction of, a business already in existence, or by the transfer to a new business of any building, machinery or plant used in a business which was being carried on, on or before the first day of July, 1983.
(5) The provisions of this paragraph shall apply to the assessment for the year next following the income year in which commercial production is commenced, or the loss under paragraph 2(3) or allowance, if any, under paragraph 2(4), as the case may be, has been set off or deducted in full, whichever is the later, and for the next following four years.