Section 115JA:
Deemed income relating to certain companies.
1(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 2
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;
3
(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 4
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
5
(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 6
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 7
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 8
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); 9
or
10
(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.
Notes:
1. Ins. by Act 33 of 1996, s. 39 (w.e.f. 1-4-1997).
2. Ins. by Act 10 of 2000, s. 50 (w.e.f. 1-4-2001).
3. Subs. by Act 33 of 2009, s. 44, for “if any amount referred to in clauses (a) to (f) is debited to the profit and loss account,
and as reduced by, —” (w.e.f. 1-4-1998).
4. Ins. by Act 10 of 2000, s. 50 (w.e.f. 1-4-2001).
5. Subs. by Act 20 of 2002, s. 51, for “clause (iii) and the Explanation thereto” (w.e.f. 1-4-1997).
6. Subs. by Act 27 of 1999, s. 90, for “sub-clause (b) or sub-clause (c) of clause (iv) of sub-section (2) of section 80-IA”
(w.e.f. 1-4-2000).
7. Subs. by s. 90, ibid., for “profits and gains under sub-section (5) of section 80-IA” (w.e.f. 1-4-2000).
8. Subs. by s. 90, ibid., for “under sub-section (12) of section 80-IA, and subject to fulfilling the conditions laid down in
sub-section (4A) of section 80-IA” (w.e.f. 1-4-2000).
9. Ins. by Act 26 of 1997, s. 37 (w.e.f. 1-4-1997).
10. Ins. by s. 37, ibid. (w.e.f. 1-4-1998).