Section 115JA of Income Tax Act "Deemed income relating to certain companies"
115JA. (1) Notwithstanding anything contained in any
other provisions of this Act, where in the case of an
assessee, being a company, the total income, as computed
under this Act in respect of any previous year relevant to
the assessment year commencing on or after the 1st day of
April, 1997 but before the 1st day of April, 2001 (hereafter
in this section referred to as the relevant previous year)
is less than thirty per cent of its book profit, the total
income of such assessee chargeable to tax for the relevant
previous year shall be deemed to be an amount equal to
thirty per cent of such book profit.
(2) Every assessee, being a company, shall, for the purposes
of this section prepare its profit and loss account for the
relevant previous year in accordance with the provisions of
Parts II and III of Schedule VI to the Companies Act, 1956
(1 of 1956) :
Provided that while preparing profit and loss account,
the depreciation shall be calculated on the same method and
rates which have been adopted for calculating the
depreciation for the purpose of preparing the profit and
loss account laid before the company at its annual general
meeting in accordance with the provisions of section 210 of
the Companies Act, 1956 (1 of 1956) :
Provided further that where a company has adopted or adopts
the financial year under the Companies Act, 1956 (1 of
1956), which is different from the previous year under the
Act, the method and rates for calculation of depreciation
shall correspond to the method and rates which have been
adopted for calculating the depreciation for such financial
year or part of such financial year falling within the
relevant previous year.
Explanation.-For the purposes of this section, "book profit"
means the net profit as shown in the profit and loss account
for the relevant previous year prepared under sub-section
(2), as increased by-
(a) the amount of income-tax paid or payable, and the
provision therefor; or
(b) the amounts carried to any reserves by whatever name
called; or
(c) the amount or amounts set aside to provisions made for
meeting liabilities, other than ascertained liabilities; or
(d) the amount by way of provision for losses of subsidiary
companies; or
(e) the amount or amounts of dividends paid or proposed; or
(f) the amount or amounts of expenditure relatable to any
income to which any of the provisions of Chapter III
applies;
(g) the amount or amounts set aside as provision for
diminution in the value of any asset,
if any amount referred to in clauses (a) to (g) is debited
to the profit and loss account, and as reduced by,-
(i) the amount withdrawn from any reserves or provisions if
any such amount is credited to the profit and loss account :
Provided that, where this section is applicable to an
assessee in any previous year (including the relevant
previous year), the amount withdrawn from reserves created
or provisions made in a previous year relevant to the
assessment year commencing on or after the 1st day of April,
1997 but ending before the 1st day of April, 2001 shall not
be reduced from the book profit unless the book profit of
such year has been increased by those reserves or provisions
(out of which the said amount was withdrawn) under this
Explanation; or
(ii) the amount of income to which any of the provisions of
Chapter III applies, if any such amount is credited to the
profit and loss account; or
(iii) the amount of loss brought forward or unabsorbed
depreciation, whichever is less as per books of account.
Explanation.-For the purposes of this clause,-
(a) the loss shall not include depreciation;
(b) the provisions of this clause shall not apply if the
amount of loss brought forward or unabsorbed depreciation is
nil; or
(iv) the amount of profits derived by an industrial
undertaking from the business of generation or generation
and distribution of power; or
(v) the amount of profits derived by an industrial
undertaking located in an industrially backward State or
district as referred to in sub-section (4) and sub-section
(5) of section 80-IB, for the assessment years such
industrial undertaking is eligible to claim a deduction of
hundred per cent of the profits and gains under sub-section
(4) or sub-section (5) of section 80-IB; or
(vi) the amount of profits derived by an industrial
undertaking from the business of developing, maintaining and
operating any infrastructure facility as defined in the
Explanation to sub-section (4) of section 80-IA and subject
to fulfilling the conditions laid down in that sub-section;
or
(vii) the amount of profits of sick industrial company for
the assessment year commencing from the assessment year
relevant to the previous year in which the said company has
become a sick industrial company under sub-section (1) of
section 17 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (1 of 1986) and ending with the
assessment year during which the entire net worth of such
company becomes equal to or exceeds the accumulated losses.
Explanation.-For the purposes of this clause, "net worth"
shall have the meaning assigned to it in clause (ga) of
sub-section (1) of section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985 (1 of 1986); or
(viii) the amount of profits eligible for deduction under
section 80HHC, computed under clause (a), (b) or (c) of
sub-section (3) or sub-section (3A), as the case may be, of
that section, and subject to the conditions specified in
sub-sections (4) and (4A) of that section;
(ix) the amount of profits eligible for deduction under
section 80HHE, computed under sub-section (3) of that
section.
(3) Nothing contained in sub-section (1) shall affect the
determination of the amounts in relation to the relevant
previous year to be carried forward to the subsequent year
or years under the provisions of sub-section (2) of section
32 or sub-section (3) of section 32A or clause (ii) of
sub-section (1) of section 72 or section 73 or section 74 or
sub-section (3) of section 74A.
(4) Save as otherwise provided in this section, all other
provisions of this Act shall apply to every assessee, being
a company, mentioned in this section.