Chapter 2- Controlled companies and powers to protect the revenue in case of certain transactions

Section 140. Power to disregard certain transactions.

(1) The Director General, where he has reason to believe that any transaction has the direct or indirect effect of-

may, without prejudice to such validity as it may have in any other respect or for any other purpose, disregard or vary the transaction and make such adjustments as he thinks fit with a view to counter-acting the whole or any part of any such direct or indirect effect of the transaction.

(2) In exercising his powers under this section, the Director General may-

(3) Without prejudice to the generality of the foregoing subsections, the powers of the Director General conferred by this section shall extend-

(4) Where in accordance with this section the Director General requires from a person the return of the amount of a repayment of tax already made-

[Am. Act A1151:s.24]

(5) Where in consequence of any adjustment made under this section an assessment is made, a right to repayment is refused or a return of a repayment of tax is required, particulars of the adjustment shall be given with the notice of assessment, with the notice refusing the repayment or with the notice requiring the return of a repayment, as the case may be.

(6) Transactions-

shall be deemed to be transactions of the kind to which subsection (1) applies if in the opinion of the Director General those transactions have not been made on terms which might fairly be expected to have been made by independent persons engaged in the same or similar activities dealing with one another at arm's length.

(7) Notwithstanding any other provision of this section, where a transaction to which this section relates consists of a settlement on a relative or on a relative and other persons, nothing in this section and no powers exercised thereunder shall affect the interests of the relative under the settlement.

(8) In this section-

"relative" means a parent, a child (including a stepchild and a child adopted in accordance with any law), a brother, a sister, an uncle, an aunt, a nephew, a niece, a cousin, an ancestor or a lineal descendant;

"transaction" means any trust, grant, covenant, agreement, arrangement or other disposition or transaction made or entered into orally or in writing (whether before or after the commencement of this Act), and includes a transaction entered into by two or more persons with another person or persons.


[Shall have effect for the year of assessement 2004 and subsequent years of assessment.]
[Am. Act A1151:s.24]

Related reading:
[Act.A 1151:s.24]

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