What is Calculation in case of joint operation, etc?
What is Treatment of common costs? Section 115VH and
Income Tax Act 1961
Calculation in case of joint operation, etc and
Treatment of common costs are
defined under sections 115VH and 115VJ of Income Tax Act 1961.
Provisions under these Sections are :
Section 115VH of Income Tax Act "Calculation in
case of joint operation, etc"
Section 115VH. (1) Where a qualifying ship is operated by
two or more companies by way of joint interest in the ship
or by way of an agreement for the use of the ship and their
respective shares are definite and ascertainable, the
tonnage income of each such company shall be an amount equal
to a share of income proportionate to its share of that
(2) Subject to the provisions of sub-section (1), where
two or more companies are operators of a qualifying ship,
the tonnage income of each company shall be computed as if
each had been the only operator.
Section 115VJ of Income Tax Act "Treatment of
Section 115VJ. (1) Where a tonnage tax company also carries
on any business or activity other than the tonnage tax
business, common costs attributable to the tonnage tax
business shall be determined on a reasonable basis.
(2) Where any asset, other than a qualifying ship, is not
exclusively used for the tonnage tax business by the tonnage
tax company, depreciation on such asset shall be allocated
between its tonnage tax business and other business on a
fair proportion to be determined by the Assessing Officer,
having regard to the use of such asset for the purpose of
the tonnage tax business and for the other business.