Comment on the following in the context of provisions contained in the Income-tax Act, 1961: The provisions of section 115JB are applicable in case of foreign companies.

Section 115JB of the Income Tax Act, 1961, states that 'all companies having book profits under the Companies Act shall have to pay MAT at the rate of 18.5%'; there is no provision restricting its applicability to only domestic companies. Thus, MAT is applicable to all companies irrespective of it being a domestic company or a foreign company. However, MAT is required to be computed with reference to book profits computed on the basis of profit and loss account prepared as per the Companies Act, and the Companies Act requires only foreign companies, having a place of business within India, to prepare and file its financial statements with the Registrar of Companies. Hence, the MAT provisions shall not apply to foreign companies, which do not have any presence in India. Alternative Answer: The Authority for Advance Ruling has delivered the ruling in the case of the Timken Company holding that the provisions of section 115JB of the Income-tax Act, 1961 levying MAT on the book profit of a company would not apply to a foreign company not having any physical presence in India. Hence, provisions of Section 115JB are applicable only to those foreign companies which have physical presence in India.