Sick industrial company status can keep a company outside MAT under section 115JB, even without a separate dissolved-Board certificate.

A sick industrial company under the special enactment was treated as outside the scope of section 115JB because its negative net worth and sick-company status were accepted, and a separate certificate from the dissolved Board was not required after repeal. On that basis, the minimum alternate tax provision was not applied to the assessee, and the addition made under section 115JB was deleted. The alternative argument on whether the credit balance written off was taxable as a capital receipt was not examined further once inapplicability of section 115JB was concluded.

---

---

Issues: Whether the assessee, being a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985, was outside the ambit of section 115JB of the Income-tax Act, 1961, and whether the disputed addition to the profit and loss account could be sustained under that provision.

Analysis: The assessee's negative net worth and sick-company status were accepted. The demand for a separate certificate from the Board under the repealed special enactment was held to be unwarranted, since the Board stood dissolved on repeal and the statutory scheme continued to govern the issue to the extent relevant. In that situation, the assessee was treated as covered by section 17 of the special enactment and, consequently, as outside the application of section 115JB. In view of that conclusion, the alternative contention regarding taxability of the credit balance written off as a capital receipt under section 115JB was not examined further.

Conclusion: Section 115JB was held not applicable to the assessee, and the addition made under that provision was deleted.

Final Conclusion: The assessee succeeded on the principal question of applicability of the minimum alternate tax provision, and the assessment made under section 115JB could not stand.

Ratio Decidendi: Where a company is accepted as a sick industrial company under the relevant special enactment, section 115JB cannot be applied merely because a separate certificate from the dissolved Board is not produced.

---