what is a basic condition for any company to bacome a SICK industrial company ( under Sick industrial company Act).
is any difference to calculate a book profit u/s 115JB (MAT) for Sick industrial companies ?
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I don't remember exactly, but as per SICA I think if the accumulated losses exceed 50% of net worth, then the company is sick. I am not sure if anything has changed or not.
MAT doesn't come until the year after the company wipes off its losses.
Sick Industrial Undertaking: 3 Conditions prescribed -U/s 3(1) (o) of SICA
1. It should be Industrial Comapny
2. Registered for 5 years or more.
3. Accumulated losses > Net worth ( Paid up Capital + Free Reserves.
For such companies its Board of Directors ( or RBI, CG, State Govt Financial Institute etc. ) may make a reference to BIFR. BIFR after making such inquireis and carrying on procedures decides whether the undertaking is sick or not.
If a company owns a sick industrial undertaking it is not required to consider the profits . if any , of the sick utkg for the purpose of calculating MAT.
When the company as a whole is sick undertaking , it is not required to pay MAT.
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