This appeal has been filed by Revenue against order of CIT(A)- XLIV, Mumbai, on following grounds: "1. On facts and in circumstances of case and in law, learned CIT(A) erred in holding that onus was on part of AO to establish applicability of s. 41(1) and accordingly deleting addition made under s. 41(1) of Rs. 10,00,000, ignoring fact that assessee failed to discharge primary onus in filing details of outstanding sundry creditors shown in suspense account for Rs. 10,00,000. On facts and in circumstances of case and in law, learned CIT(A) has erred in holding that capital gain cannot be included in computation of profit under s. 115JA and accordingly directing AO to exclude capital gains in calculation of deemed profits under s. 115JA, without appreciating applicability of decision of Indo Marine Agencies (Kerala) (P) Ltd. vs. Asstt. CIT (1995) 51 TTJ (Coch) 18 relied upon by AO which was also confirmed by Bombay High Court in case of CIT vs. Veekaylal Investment Co. (P) Ltd. (2001) 166 CTR (Bom) 96: (2001) 249 ITR 597 (Bom) dt. 8th Feb., 2001." assessee-company is dealing in air-conditioners and refrigeration parts. first issue is regarding addition of Rs. 10,00,000 on account of sundry creditors suspense account. facts are that in list of sundry creditors, total outstanding amount was shown as Rs. 14,08,600. In response to AO s query regarding sundry creditors, assessee submitted confirmation letters from six creditors. AO, therefore, was satisfied that sundry creditors were genuine to that extent. AO found that sundry creditors suspense account had further outstanding sum of Rs. 10 lakhs. According to AO, assessee was not able to identify persons to whom this amount was payable. Since assessee was not in position to explain this amount, AO held that this amounted to cessation of liability. Accordingly, AO invoked provisions of s. 41(1) of IT Act and brought to tax same sum of Rs. 10 lakhs. Being aggrieved by order of AO, assessee carried matter in appeal before learned CIT(A), wherein it was submitted that liability was in respect of Madras Branch of assessee-company. It was stated that books of account of Madras Branch were misplaced after closure of branch. Accordingly, assessee was unable to furnish details of sundry creditors. stand of assessee was that since assessee was unable to furnish details, it does not mean that there was cessation of liability. learned CIT(A) observed that inability to furnish details of sundry creditors on part of assessee does not lead to conclusion that s. 41(1) was applicable. Further onus was on AO to establish that s. 41(1) was applicable. This onus has not been discharged. There was no material to hold that there was remission of liability and, therefore, s. 41(1) could not be invoked. Accordingly, addition of Rs. 10 lakhs was deleted. Before us, learned Departmental Representative supported order of AO, while learned Authorised Representative of assessee supported order of learned CIT(A). learned Authorised Representative of assessee submitted that assessee could not produce details of sundry creditors, because books of account of Madras Branch were misplaced where these entries were made. AO has not established fact that there is remission of liability. However, learned Authorised Representative of assessee submitted that since details of these creditors were in record of earlier assessment year, assessee can produce details of sundry creditors if opportunity for same is provided. So, in interest of justice, we set aside order of authorities below and restore this issue to file of AO with direction to decide issue in question in accordance with provisions of law after providing due opportunity of hearing to assessee. assessee is also directed to co-operate for same. second issue is regarding application of s. 115JA of IT Act, 1961, in respect of capital assets sold. facts are that book profits including sale of capital asset were Rs. 83,26,670 whereas for purpose of taxation income offered was Rs. 1,32,840. According to AO, as book profits were more than returned profits, assessee should have offered of its income under s. 115JA of Act. In this regard, stand of assessee was that capital gains arising under s. 50 of IT Act, 1961, on depreciable asset was capital gains arising under s. 50 of IT Act, 1961, on depreciable asset was invested for purchase of another asset. It was submitted that object of bringing s. 115JA of Act on statute was that every corporate entity would pay minimum corporate tax on profit declared in its accounts. It was argued that these profits were profits from business and not capital gains. It was argued that while interpreting statute, one has to adopt construction that would promote general legislative purpose underlying provisions of statute. It was argued that s. 115J was incorporated to make companies pay taxes on their business income which would have been reduced in regular assessment on basis of deductions available in Act. In this case, during year, assessee had sold asset and purchased another asset in same block. It was submitted that there was no income in hands of assessee, much less business income. It was argued that item 3(xii)(a) to Part II to Sixth Schedule provided that profit or loss or on investment should be shown or credited to P&L a/c only to extent that has remained unadjusted from any previous provisions of reserve. It was also submitted that entire capital gain was reabsorbed in fresh investment by assessee, no amount was taxable under s. 115JA of IT Act. AO relying on ratio of decision in case of Indo Marine Agencies (Kerala) (P) Ltd. vs. Asstt. CIT (1995) 51 TTJ (Cochin) 18 and other decisions worked out total income on basis of book profits of assessee. matter was carried in appeal before first appellate authority, wherein various contentions were raised which are detailed in Para 5 of order of learned CIT(A). learned CIT(A) held as under: "I have considered facts of case and arguments of appellant. In case of Sutlej Cotton Mills Ltd. (supra), Special Bench had held that book profits mentioned under s. 115J would not include profit realization of any asset. It was also held by Special Bench that any item exempted under s. 54E would not be taxed under s. 115J. In case of GKW Ltd. (supra) Calcutta Bench of Tribunal held that there was no difference between s. 115JA and s. 115J. In this case, Tribunal held that profit under head Capital gains would not be part of book profits as required to be shown in P&L a/c under provisions of Companies Act. Tribunal also relied on Third Member decision in case of Asstt. CIT vs. Northern India Theatres (P) Ltd. (1996) 133 CTR (Del)(TM) 326 wherein it was held that items of credit do not relate to business carried out by company and are included in P&L a/c they do not partake character of business income and therefore, are not hit by provisions of s. 115JA of IT Act. On other hand, in case of Indo Marine (Kerala) (P) Ltd. decision which was passed after decision of Special Bench of Tribunal did not take into account decision of Special Bench and held that capital gains on sale of assets should be considered for purpose of computation under s. 115J of IT Act. decision of Kerala Bench was erroneous as it was contrary to decision of Special Bench of Tribunal in case of Sutlej Cotton Mills." Before us, learned Departmental Representative supported order of AO, while learned Authorised Representative of assessee supported order of learned CIT(A). issue before us is that whether capital gain to be included in computation of profit under s. 115JA of Act or not. case of assessee is that due to sale of capital assets, assessee has earned profit to tune of Rs. 83,26,670. assessee claimed exemption on these capital gains under provisions of s. 50 of IT Act. AO computed capital gains under provisions of s. 115JA while including this amount of Rs. 83,26,670. According to AO, this amount forms part of book profits determined under provisions of Part II and Part III of Schedule VI of Companies Act, 1956. Thus, according to AO thought this amount is exempted under provisions of s. 50, same is taxable under provisions of s. 115JA. learned CIT(A) did not agree with findings of AO and after referring to provisions of sub-s. (4) of s. 115JA he deleted addition made by AO under Act, any receipt in nature of income alone is taxable. Sec. 115JA is also part of Act. No doubt, it starts with non obstante clause and overrides other provisions of Act but that is only confined to determination of total income. It only substitutes total income based on book profits but it does not enlarge scope of taxable income or total income which is chargeable to tax. receipt, which is not in nature of income, cannot be taxed as income under s. 115JA. When accounts are prepared in accordance with Part-II and Part-III of Sch. VI of Companies Act while making adjustments as per provisions of s. 115JA, to compute book profits, amounts which are not taxable or exempt are excluded, because such amounts do not really reflect receipt in nature of income and, therefore, such amounts cannot form part of profit reflecting real working results. For example, if assessee receives amount for non-competent covenant which have been held by Courts to constitute capital receipt and not income. Similarly, considering case of mutual association-company, where amounts contributed by members are not treated as income of association. On such receipts, tax is not payable at all. However, while computing book profits such types of receipts do not form part of book profits, though they are reflected in P&L a/c. company includes such receipts as part of P&L a/c to reflect only working results of company as per requirement stipulated in schedule but it does not mean that such receipts are taxable, because they have been included in book profits. On same analogy, assessee has included exempted income in P&L a/c for reflecting correct working results of company. capital gains, in this case, are exempt under s. 50 of Act and this fact has not been disputed by Department. Therefore, these capital gains are not in nature of income and they cannot be taxed as income under provisions of s. 115JA of Act. It is settled legal position that s. 115J is self-contained code. This is applicable only to provisions of s. 115JA. But in s. 115JA new sub-s. (4) has been brought out on statute which was not there is s. 115J. Sub-s. (4) of s. 115JA now starts that "save as otherwise provided all other provisions of Act shall apply". Thus, sub-s. (4) has been introduced first time in s. 115JA. Now other provisions of Act will continue to operate in view of sub-s. (4). Therefore, exempt income under s. 50 of Act would remain exempted as per provisions of sub-s. (4). operation of non obstante clause is now limited only to determine book profits and book profits so determined has to be taxed taking into consideration other provisions of Act. In other words, s. 115JA is part of Act now and exemption allowed by one provision of Act cannot be taken away by another provision of Act. In present case, if exemption allowed under s. 50 of Act is taken away while taxing, book profits under s. 115JA, it will make provision of s. 50 of Act as redundant. This interpretation is not justified. ratio of Apollo Tyres vs. CIT (2002) 174 CTR (SC) 521: (2002) 255 ITR 273 (SC) is distinguishable because same has been rendered in context of provisions of s. 115J which is independent code, while s. 115JA is not independent code and Legislature in their wisdom has brought sub-s. (4) of s. 115JA on statute to make s. 115JA also part of Act. Regarding relevance of decision relied on by Revenue in case of Indo Marine Agencies (Kerala) (P) Ltd. vs. Asstt. CIT (supra) and CIT vs. Veekaylal Investment Co. (P) Ltd. (supra). These cases were rendered as per provisions of s. 115J which is self-contained code. As has been held in number of cases, whereas s. 115JA is not self-contained code. Sub-s. (4) has been inserted first time and it has made s. 115JA also part of Act. Therefore, exemptions allowed under one provision of Act, cannot be taken away by another provision of Act. In above cases, there is capital gain which was taxable under s. 45 of Act. So, Hon ble Courts decided that once income under s. 45 is includible in taxable income, why same income should not be included in book profits determined under s. 115JA of Act. But in present case, capital gains earned by assessee are exempt under s. 50 of Act and they will not form part of taxable income. Therefore, this exempted income should not be part of capital gains. Sec. 115JA only stipulates total income based on book profits, but does not enlarge scope of income. In other words, receipt which is not in nature of income cannot be taxed as income under s. 115JA. Similar view has been taken b y Bombay Bench B of Tribunal in case of Rolta India Ltd. vs. Jt. CIT (IT Appeal No. 20 (Mum) of 2001), for asst. yr. 1997-98, which has been authored by Hon ble AM who is one of members of this constitution. Relying on provisions of sub-s. (4) of s. 115JA, Tribunal has observed that s. 115J is distinguishable from present section. Relevant portion of same is reproduced hereunder: "From above we find that judgment in case of Kwality Biscuits (supra) is based on this consideration that provisions of s. 115J are to be applied for computation of income for purpose of this section and not for other sections. But in present case, we find that we are dealing with s. 115JA and it is specified in sub-s. (4) of this section that save otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being company, mentioned in this section. There was no similar provision in s. 115J and therefore, this judgment cannot be made applicable to present case. This observation of Their Lordships. When deeming fiction is brought under statute it is to be carried for its logical conclusion but without creating further deeming fiction so as to include other provisions of Act which are not specifically made application . Rather goes against assessee because in s. 115JA, other provisions of Act are specifically made applicable to assessee being company and hence deeming fiction has to be carried to its logical conclusion in present case as held in this judgment. Under these facts and circumstances, we do not find any infirmity in order of learned CIT(A) and decline to interfere with same on this point. This ground of assessee fails." In view of above discussion, we are not inclined to interfere in finding of learned CIT(A). same is upheld. As result, appeal of Revenue is partly allowed. *** INCOME TAX OFFICER v. FRIGSALES (INDIA) LTD.