India - Income Tax Act 2010 - Saarc

S. 115VZB I.T. ACT, 1961 1.594amalgamated company from the business of operating qualifying ships shall becomputed in accordance with the other provisions of this Act.Demerger.115VZ. Where in a scheme of demerger, the demerged company transfers itsbusiness to the resulting company before the expiry of the option fortonnage tax scheme, then, subject to the other provisions of this Chapter, thetonnage tax scheme shall, as far as may be, apply to the resulting company forthe unexpired period if it is a qualifying company:Provided that the option for tonnage tax scheme in respect of the demergedcompany shall remain in force for the unexpired period of the tonnage taxscheme if it continues to be a qualifying company.F.—MiscellaneousEffect of temporarily ceasing to operate qualifying ships.115VZA. (1) A temporary cessation (as against permanent cessation) of operatingany qualifying ship by a company shall not be considered as acessation of operating of such qualifying ship and the company shall be deemedto be operating such qualifying ship for the purposes of this Chapter.(2) Where a qualifying company continues to operate a ship, which temporarilyceases to be a qualifying ship, such ship shall not be considered as a qualifyingship for the purposes of this Chapter.Avoidance of tax.G.—Provisions of this Chapter not to apply in certain cases115VZB. (1) Subject to the provisions of this Chapter, the tonnage tax schemeshall not apply where a tonnage tax company is a party to anytransaction or arrangement which amounts to an abuse of the tonnage taxscheme.(2) For the purposes of sub-section (1), a transaction or arrangement shall beconsidered an abuse if the entering into or the application of such transaction orarrangement results, or would but for this section have resulted, in a taxadvantage being obtained for—(i) a person other than a tonnage tax company; or(ii) a tonnage tax company in respect of its non-tonnage tax activities.Explanation.—For the purposes of this section, “tax advantage” include,—(i) the determination of the allowance for any expense or interest, or thedetermination of any cost or expense allocated or apportioned, or, asthe case may be, which has the effect of reducing the income orincreasing the loss, as the case may be, from activities other thantonnage tax activities chargeable to tax, computed on the basis ofentries made in the books of account in respect of the previous yearin which the transaction was entered into; or(ii) a transaction or arrangement which produces to the tonnage taxcompany more than ordinary profits which might be expected toarise from tonnage tax activities.