Section 115VM of Income Tax Act "Exclusion of loss"
115VM. (1) Section 72 shall apply in respect of any
losses that have accrued to a company before its option for
tonnage tax scheme and which are attributable to its tonnage
tax business, as if such losses had been set off against the
relevant shipping income in any of the previous years when
the company is under the tonnage tax scheme.
(2) The losses referred to in sub-section (1) shall not be
available for set off against any income other than relevant
shipping income in any previous year beginning on or after
the company exercises its option under section 115VP.
(3) Any apportionment necessary to determine the losses
referred to in sub-section (1) shall be made on a reasonable
basis.
115VN. Any profits or gains arising from the transfer of
a capital asset being an asset forming part of the block of
qualifying assets shall be chargeable to income-tax in
accordance with the provisions of section 45, read with
section 50, and the capital gains so arising shall be
computed in accordance with the provisions of sections 45 to
51:
Provided that for the purpose of computing such profits or
gains, the provisions of section 50 shall have effect as if
for the words "written down value of the block of assets",
the words "written down value of the block of qualifying
assets" had been substituted.
Explanation.-For the purposes of this Chapter, "written down
value of the block of qualifying assets" means the written
down value computed in accordance with the provisions of
sub-section (2) of section 115VK.
115V-O. The book profit or loss derived from the activities of a tonnage tax company, referred to in sub-section (1) of section 115V-I, shall be excluded from the book profit of the company for the purposes of section 115JB.