Section 115VV of Income Tax Act "Limit for charter in of tonnage"
115VV. (1) In the case of every company which has opted
for tonnage tax scheme, not more than forty-nine per cent of
the net tonnage of the qualifying ships operated by it
during any previous year shall be chartered in.
(2) The proportion of net tonnage referred to in sub-section
(1) in respect of a previous year shall be calculated based
on the average of net tonnage during that previous year.
(3) For the purposes of sub-section (2), the average of net
tonnage shall be computed in such manner as may be
prescribed in consultation with the Director-General of
Shipping.
(4) Where the net tonnage of ships chartered in exceeds the
limit under sub-section (1) during any previous year, the
total income of such company in relation to that previous
year shall be computed as if the option for tonnage tax
scheme does not have effect for that previous year.
(5) Where the limit under sub-section (1) had exceeded in
any two consecutive previous years, the option for tonnage
tax scheme shall cease to have effect from the beginning of
the previous year following the second consecutive previous
year in which the limit had exceeded.
Explanation.-For the purposes of this section, the term
"chartered in" shall exclude a ship chartered in by the
company on bareboat charter-cum-demise terms.
115VW. An option for tonnage tax scheme by a tonnage tax
company shall not have effect in relation to a previous year
unless such company-
(i) maintains separate books of account in respect of the
business of operating qualifying ships; and
(ii) furnishes, 4[before the specified date referred to in
section 44AB], the report of an accountant, in the
prescribed form duly signed and verified by such accountant.
Explanation.-For the purposes of this section, "accountant"
shall have the same meaning as in the Explanation below
sub-section (2) of section 288.