Chapter XII-B

29[1] [Chapter XII-B

Special Provisions relating to certain companies

Special provisions relating to certain companies.

115J. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company 30[2] [(other than a company engaged in the business of generation or distribution of electricity)], 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, 1988 31[3] [but before the 1st day of April, 1991] (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.

32[4] [(1A) 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).]

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 33[5] [prepared under sub-section (1A),], as increased by—

(a) the amount of income-tax paid or payable, and the provision therefor; or

(b) the amounts carried to any reserves 34[6] [(other than the reserves specified in section 80HHD 35[7] [or sub-section (1) of section 33AC])], by whatever name called; 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 36[8] [applies; or]

34[9] [(g) the amount withdrawn from the reserve account under section 80HHD, where it has been utilised for any purpose other than those referred to in sub-section (4) of that section ; or

(h) the amount credited to the reserve account under section 80HHD, to the extent that amount has not been utilised within the period specified in sub-section (4) of that section;]

35[10] [(ha) the amount deemed to be the profits under sub-section (3) of section 33AC;]

37[11] [if any amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited] to the profit and loss account, and as reduced by,—

(i) the amount withdrawn from reserves 34[12] [(other than the reserves specified in section 80HHD)] or provisions, if any such amount is credited to the 38[13] [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, 1988 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

39[14] [(iii) the amounts [as arrived at after increasing the net profit by the amounts referred to in clauses (a) to (f) and reducing the net profit by the amounts referred to in clauses (i) and (ii)] attributable to the business, the profits from which are eligible for deduction under section 80HHC or section 80HHD; so however, that such amounts are computed in the manner specified in sub-section (3) or sub-section (3A) of section 80HHC or sub-section (3) of section 80HHD, as the case may be; or]

40[15] [(iv)] the amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year as if the provisions of clause (b) of the first proviso to sub-section (1) of section 205 of the Companies Act, 1956 (1 of 1956), are applicable.

(2) 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 or sub-section (3) of section 80J.]

The Following Chapter XII-C shall be inserted by the Finance Act, 1992, w.e.f. 1-4-1993:

Chapter XIIC

Special provisions relating to retail trade, etc.

Special provision for computation of income from business in certain cases.

115K. (1) Notwithstanding anything contained in any other provision of this Act relating to the computation of income chargeable under the head “Profits and gains of business or profession”, in the case of any person, to whom this section applies, carrying on—

(a) the business of retail trade in any goods or merchandise and who submits a statement in accordance with the provisions of sub-section (4), a sum equal to seven per cent of the amount specified in sub-section (5) shall be deemed to be the profits and gains of such person from the business of retail trade;

(b) the business of running an eating place or engaged in any vocation and who submits a statement in accordance with the provisions of sub-section (4), a sum of thirty-five thousand rupees shall be deemed to be the profits and gains of such person from such business or vocation.

(2) The provisions of sub-section (1) shall apply to any person, being an individual or a Hindu undivided family, where—

(a) such person has not been assessed to income-tax for any assessment year commencing on or before the 1st day of April, 1992;

(b) in the case of person referred to in—

(i) clause (a) of sub-section (1), his turnover from the business of retail trade during the relevant previous year does not exceed five lakh rupees and his income from such business during that year does not exceed thirty-five thousand rupees;

(ii) clause (b) of sub-section (1), his income from the business of running the eating place or the vocation during the relevant previous year does not exceed thirty-five thousand rupees; and

(c) such person does not have any income, in excess of five thousand rupees in the aggregate, chargeable to tax from any source falling under any head of income other than the income from the business of retail trade or from the business of running the eating place or from the vocation during the relevant previous year.

(3) Any person to whom this section applies shall be liable to pay tax at the rate specified in the Finance Act of the relevant year for computing advance tax on the income deemed under sub-section (1) and the other income referred to in clause (c) of sub-section (2).

(4) Every statement referred to in sub-section (1) shall—

(a) be in the prescribed form, contain the name of such person, his address, nature of business or vocation and a declaration by him that,—

(i) where he is carrying on the business of retail trade, his turnover from such trade during the relevant previous year does not exceed five lakh rupees and his income from such trade during that year does not exceed thirty-five thousand rupees;

(ii) where he is carrying on the business of running the eating place or is engaged in the vocation, his income during the relevant previous year from such business or vocation does not exceed thirty-five thousand rupees;

and such statement shall also be verified in the prescribed manner:

(b) be submitted on or before the 31st day of March of the relevant previous year along with the proof of payment of the amount of tax referred to in sub-section (3).

(5) In the case of a person who has submitted a statement under clause (a) of sub-section (1), an annual turnover of five lakh rupees from the retail trade carried on by him during the relevant previous year shall be deemed to be the amount referred to in that sub-section.

(6) The provisions of this Chapter shall apply in relation to the assessment year commencing on the 1st day of April, 1993 and the 1st day of April, 1994.

Explanation : For the purpose of this section, “vocation” includes tailoring, hair-cutting, cloths’ washing, typing, photo-copying, repair work of any kind and other services of a similar nature.

Return of income not to be filed in certain cases.

115L. Subject to the provisions of section 115N, a person who has submitted a statement under sub-section (1) of section 115K shall not be required to furnish a return of income under sub-section (1) of section 139 and the other provisions of Chapter XVI will not apply in his case.

Special provision for disallowance of deductions and rebate of income-tax.

115M. No deduction under Chapter VI-A (except section 80L) or rebate of income-tax under Chapter VIII shall be allowed in the case of a person who has submitted a statement under sub-section (1) of section 115K.

Bar of proceedings in certain cases.

115N. No proceeding under any other Chapter of this Act shall be initiated against any person who has submitted a statement under sub-section (1) of section 115K in respect of his income from retail trade for the relevant assessment year unless the Deputy Commissioner, in consequence of evidence in his possession, has reason to believe that the statement furnished by any person under section 115K is untrue.