Computation of book profits under section 115J of the Income-tax Act, 1961--Effect of clause (iii) of the ^Explanation^ under section 115J

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....ed 21/2/1994 To All Chief Commissioners of Income-tax All Directors-General of Income-tax. Sir, Clause (iii) of the Explanation under section 115J, which was inserted by the Direct Tax Laws (Amendment) Act, 1989, with effect from assessment year 1989-90, provides for a deduction from the book-profits attributable to a business, the profits from which are eligible for deduction under....

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.... it was stated in para 9.2 of the Board's Circular No. 559 dated 4-5-1990, that the intention behind introduction of the said Explanation was to ensure that the provisions of section 115J, which provided for a tax on the book-profits, did not take away the 100 per cent. exemption which was to be allowed in respect of export profits and the profits from tourism-related industry. It was also sta....

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....r that it is only the manner of computation specified in section 80HHC(3) or (3A) or 80HHD, and not the amounts themselves, that should be imported into Explanation (iii) under section 115J. 3. Accordingly, the deduction contemplated under Explanation (iii) to section 115J should be computed according to the following steps :_ (i) it should be first decided whether the assessee carries....