[Inserted by Act 32 of 1985, Section 7 (w.e.f. 1.4.1986).](1)Subject to the provisions of sub-section (2), where the assessee has paid in [ Inserted by Act 27 of 1999, Section 16 (w.e.f. 1.4.2006).][any previous year relevant to the assessment year commencing on or before the 1st day of April, 1998] [ Substituted by Act 21 of 1998, Section 13, for " in any previous year" (w.e.f. 1.4.1999).]any lump sum consideration for acquiring any know-how for use for the purposes of his business, one-sixth of the amount so paid shall be deducted in computing the profits and gains of the business for that previous year, and the balance amount shall be deducted in equal instalments for each of the five immediately succeeding previous years.(2)Where the know-how referred to in sub-section (1) is developed in a laboratory, university or institution referred to in sub-section (2B) of section 32A, one-third of the said lump sum consideration paid in the previous year by the assessee shall be deducted in computing the profits and gains of the business for that year, and the balance amount shall be deducted in equal instalments for each of the two immediately succeeding previous years. [Inserted by Act 32 of 1985, Section 7 (w.e.f. 1.4.1986).](3)Where there is a transfer of an undertaking under a scheme of amalgamation or demerger and the amalgamating or the demerged company is entitled to a deduction under this section, then, the amalgamated company or the resulting company, as the case may be, shall be entitled to claim deduction under this section in respect of such undertaking to the same extent and in respect of the residual period as it would have been allowable to the amalgamating company or the demerged company, as the case may be, had such amalgamation or demerger not taken place. [ Inserted by Act 27 of 1999, Section 17 (w.e.f. 1.4.2000).][Explanation. - For the purposes of this section, "know-how" means any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil well or other sources of mineral deposits (including the searching for, discovery or testing of deposits or the winning of access thereto).] [Inserted by Act 32 of 1985, Section 7 (w.e.f. 1.4.1986).]
