Circular No. 552

Section 44BBB l Special Provisions for Computing Profits and Gains of Foreign Companies Engaged in the Business of Civil Construction, ETC., in Certain Turnkey Power Projects

What this is

Circular No. 552 was issued by the Central Board of Direct Taxes on 9 February 1990. Its subject is Section 44BBB l Special Provisions for Computing Profits and Gains of Foreign Companies Engaged in the Business of Civil Construction, ETC., in Certain Turnkey Power Projects.

What it does

Clarifies that an approval issued by the Department of Power in the Ministry of Energy is deemed to be the approval of the Central Government for section 44BBB, which computes on a presumptive basis the profits of foreign companies engaged in civil construction and like work in certain turnkey power projects approved by the Central Government.

Why it was issued

Section 44BBB requires the turnkey power project to be approved by the Central Government, and it had to be settled which authority's approval satisfies that requirement.

Who it reaches

Foreign companies executing turnkey power projects in India
Companies holding an approval from the Department of Power
Assessing Officers testing eligibility for the presumptive rate under section 44BBB

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.44BBB	s.61

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

SECTION 44BBB l SPECIAL PROVISIONS FOR COMPUTING PROFITS AND GAINS OF FOREIGN COMPANIES ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, ETC., IN CERTAIN TURNKEY POWER PROJECTS
416. Approval of Central Government of certain turnkey power projects
1. The provisions contained in section 44BBB of the Income-tax Act, 1961 refer to approval of certain turnkey power projects by the Central Government.
2. It is clarified that an approval issued by the Deptt. of Power in the Ministry of Energy shall be deemed to be the approval of the Central Government for the purposes of section 44BBB of the Income-tax Act.
Circular : No. 552, dated 9-2-1990.

What to watch

The approval must come from the Department of Power in the Ministry of Energy; an approval from some other authority is not covered by this deeming.
The circular settles only the approving authority; the other conditions of section 44BBB have to be met independently.
Section 44BBB has been amended since, so read its conditions and rate as they stand for the year in issue.
The Ministry named has been reorganised since, so the successor department has to be identified for a current approval.

Where you meet it

In the assessment of a foreign contractor on a power project where the presumptive computation under section 44BBB is refused for want of Central Government approval.

← Circular No. 553 · Circular No. 551 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.