2.

10 Furnishing of Report of an Accountant [Section I15JB(4) and Rule40B|

Every company to which this section applies, shall furnish a report in Form No. 29B from a
chartered accountant certifying that the book profit has been computed in accordance with the provisions
of this section along with the return of income filed under section 139(1) or along with the return of
income furnished in response to a notice under section 142(!)(/).
It may however, be noted that the company shall have to file such report even if it furnishes the
return of-income under section 139(4) instead’of section 139(1) or in response to a which notice section
142(!)(/).
2.11 Unabsorbed depreciation or losses which can be carried forward [Section I15JP(3)|
Although, the assessee is liable to pay tax @ 18.5% (plus surcharge if applicable) of the book
profits if its total income computed as per Income-tax Act is less but it is entitled to determine
unabsorbed depreciation u/s 32(2), business loss u/s 72(1), speculation loss u/s 73 and capital loss u/s 74
and loss u/s 74A and shall be allowed to carry forward such unabsorbed depreciation or losses to the
subsequent years(s) for claiming set off as per the normal provisions of Income-tax Act.
Illustration 2.2: The business income of the assessee before claiming depreciation, for the
financial year 2015-16 is 715,00,000. The book profit of the company as per provisions
of section II5JB is 78,00,000. The other details are as under:

(1) Current year depreciation 2,80,000

(2) Brought forward business loss 8,00,000
(3) Brought forward unabsorbed depreciation 5,20,000
Compute the tax payable by the company for the assessment year 2016-17.
Solution 7 7
Business income 15,00,000
Less: Current year depreciation 2,80,000
Brought forward business loss 8,00,000
Unabsorbed depreciation to the extent of balance business income 4,20,000
Total income 15,00,000
Book profit _____ N
Tax on 78,00,000 @ 18.5%
il
Add: Surcharge
Add: Education cess & SHEC - @ 3% 8.00,000
1,48,000
Nil
Unabsorbed depreciation to be carried forward 75,20,000 - 4.20.000 = 71,00.000 4,440
2.12 Are the provisions of section I I5.1B applicable to foreign companies 1,52,440
In the connection of old section 115J (the provisions of section 115JB are similar
in this case) the Authority for Advance Rulings held that such provisions are applicable
to foreign companies also and the foreign companies shall calculate its Indian profits
separately for the purpose of minimum alternate tax [P No. 14 of 1997 In re (1998) 234 ITR 828
(AAR)]. However, where a non-resident’s income is assessed on the basis of presumptive income uifder
sections 44B, 44BB, 44BBA, etc. or at a flat rate under section II5A on royalty and technical fee, the
book profit becomes immaterial for regular assessment and the presumptive income tax will prevail.
[Timken India Ltd., In re AAR 836 of 2009 (AAR)]