INCOME TAX ACT 1967 (ACT 53) PART III - ASCERTAINMENT OF CHARGEABLE INCOME Chapter 3- Gross income
Section 24. Basis period to which gross income from a business is related.
(1) Where in the relevant period a debt owing to the relevant person arises in respect of-
(a) any stock in trade sold (or parted with on requisition or compulsory acquisition or in a similar manner) in or before the relevant period in the course of carrying on a business;
(b) any services rendered at any time in the course of carrying on a business; or
(c) the use or enjoyment of any property dealt with at any time in the course of carrying on a business,
the amount of the debt shall be treated as gross income of the relevant person from the business for the relevant period.
(2) Where in the relevant period any stock in trade of a business of the relevant person is-
(a) withdrawn for his own use; or
(b) withdrawn (otherwise than on requisition or compulsory acquisition or in a similar manner) without any consideration being received therefor or for a consideration consisting of-
(i) any property not being either a debt owing to the relevant person or a sum in cash or the equivalent of cash;
(ii) any such property together with a debt owing to the relevant person or any such sum; or
(iii) any such property together with a debt owing to the relevant person and any such sum,
then, subject to subsection (3), an amount equal to the market value of that stock in trade at the time of its withdrawal shall be treated as gross income of the relevant person from the business for the relevant period.
(3) Where in a case to which subsection (2) applies the consideration for the withdrawal of any stock in trade is consideration of the kind described in paragraph (b) (ii) or (iii) of that subsection, then, for the purposes of that subsection-
(a) the amount of the market value of that stock in trade shall be reduced by the amount of the debt or sum or the amount of the debt and sum, as the case may be, referred to in whichever of those subparagraphs applies to the case;
(b) subsection (1) shall apply to the debt as if it were a debt arising on the sale of that stock in trade; and
(c) section 28 shall apply to any such sum.
(4) Subject to section 3, where in the relevant period a dividend is paid, credited or distributed to the relevant person, then, if the stock, share or other source to which the dividend relates forms or has formed in or before the relevant period part of the stock in trade of a business of the relevant person-
[Am. Act A226:s.9]
(a) the amount of the dividend shall be treated as gross income of the relevant person from the business for the relevant period, if the business is carried on at any time in the relevant period; and
(b) subsection (1) shall not apply to a debt owing to the relevant person in respect of any such dividend:
Provided that, where this subsection has applied to a dividend which has been credited, it shall not apply to that dividend when paid.
(5) Subject to section 3, where in the relevant period any gross interest first becomes receivable by the relevant person, then, if the debenture, mortgage or other source to which the interest relates forms or has formed in or before the relevant period part of the stock in trade of a business carried on by or on behalf of the relevant person, or if the interest is in respect of a loan granted in or before the relevant period in the course of carrying on the business and the business is one which includes the regular lending of money
[Am. Act A226:s.9]
(a) the interest shall be treated as gross income of the relevant person from the business for the relevant period if the business is carried on at any time in the relevant period; and
(b) subsection (1) shall not apply to a debt owing to the relevant person in respect of any such interest.
(6) Where in the relevant period any article, product, produce or other thing is exported from Malaysia in the course of carrying on a business in such circumstances that section 12 (1) applies thereto in relation to the business-
(a) subsection (2) shall not apply with respect to that article, product, produce or other thing or to any gross income received in respect thereof; and
(b) the amount equal to the market value of the article, product, produce or other thing deemed under subsection 12 (1) to be gross income derived from the business shall be treated as gross income of the relevant person from the business for the relevant period.
(7) Where this section applies to any particular item of gross income, nothing in sections 25 to 29 and nothing in section 30 shall apply to that item.
(8) This section shall not apply to income under section 4A.