TaxTMI 
TaxTMI 
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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.... 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 section 80HHC or 80HHD. It also provides that the amo....
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....o. 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 stated therein that the intention was that 100 per cent. of....
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.... 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 on a business, the profits from which are eligible for deduction....