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2005 (6) TMI 478 - AT - Income TaxMinimum alternate tax - sale of capital assets - exemption under the provisions of section 50 - HELD THAT:- In the present case, if the exemption allowed under section 50 of the Act is taken away while taxing, the book profits u/s 115JA, it will make the provision of section 50 of the Act as redundant. This interpretation is not justified. The ratio of Apollo Tyres [2002 (5) TMI 5 - SUPREME COURT] distinguishable because the same has been rendered in the context of provisions of section 115J which is independent code, while section 115JA is not an independent code and the Legislature in their wisdom has brought sub-section (4) of section 115JA on the statute to make section 115JA also a part of the Act. Regarding relevance of the decision relied on by the revenue in the case of Indo Marine Agencies (Kerala) (P.) Ltd. v. Asstt. CIT [1994 (8) TMI 69 - ITAT COCHIN] and CIT v. Veekaylal Investment Co. (P.) Ltd. [2001 (2) TMI 117 - BOMBAY HIGH COURT]. These cases were rendered as per the provisions of section 115J which is self-contained code. As has been held in a number of cases, whereas section 115JA is not self-contained code. Sub-section (4) has been inserted first time and it has made section 115JA also a part of the Act. Therefore, exemptions allowed under one provision of the Act, cannot be taken away by another provision of the Act. In the above cases, there is a capital gain which was taxable u/s 45 of the Act. So, the Hon’ble Courts decided that once income u/s 45 is includible in the taxable income, why the same income should not be included in the book profits determined u/s 115JA of the Act. But in the present case, the capital gains earned by the assessee are exempt u/s 50 of the Act and they will not form part of the taxable income. Therefore, this exempted income should not be a part of the capital gains. Section 115JA only stipulates total income based on book profits, but does not enlarge the scope of the income. In other words, a receipt which is not in the nature of income cannot be taxed as income u/s 115JA. Similar view has been taken by the Bombay Bench ‘B’ of the Tribunal in the case of Rolta India Ltd. v. Joint CIT [IT Appeal No. 20 (Mum.) of 2001], for the assessment year 1997-98, which has been authored by Hon’ble Accountant Member who is one of the Members of this constitution. Relying on the provisions of sub-section (4) of section 115JA, the Tribunal has observed that section 115J is distinguishable from the present section. Thus, we are not inclined to interfere in the finding of the learned CIT(A). The same is upheld. As a result, the appeal of the revenue is partly allowed.
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