TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 1323
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.... 5. Heard both sides. Perused orders of lower authorities. On going through the order of the Commissioner of Income Tax (Appeals) we find that Commissioner of Income Tax (Appeals) allowed the claim of the assessee hodling that clean development mechanism would constitute capital receipt in the hands of the assessee following the decision of the co-ordinate Bench in assessee's own case for the assessment year 2009-10. The co-ordinate Bench while deciding the nature of receipt i.e whether capital or revenue held as under:- "We have heard both parties and perused the relevant findings as well as case law cited (supra). The first contention of the assessee is that the amount of ` 3,39,64,303/- representing realization of entire carbon credits is a capital receipt which is contested by the Revenue, who terms it as revenue receipt liable to be taxed. We make it clear that there is no issue between the parties qua realization of the amount in question or its source and the dispute is regarding nature of receipt i.e. whether capital or revenue. In this backdrop, we find that the very issue stands adjudicated by the Coordinate Bench of ITAT, Hyderabad (supra) wherein it has been held ....
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.... assessee is similar to consideration received by transferring of loom hours. The Supreme Court considered this fact and observed that taxability of payment received for sale of loom hours by the assessee is on account of exploitation of capital asset and it is capital receipt and not an income. Similarly, in the present case the assessee transferred the carbon credits like loom hours to some other concerns for certain consideration. Therefore, the receipt of such consideration cannot be considered as business income and it is a capital receipt. Accordingly, we are of the opinion that the consideration received on account of carbon credits cannot be considered as income as taxable in the assessment year under consideration. Carbon credit is not an offshoot of business but an offshoot of environmental concerns. No asset is generated in the course of business but it is generated due to environmental concerns. Credit for reducing carbon emission or greenhouse effect can be transferred to another party in need of reduction of carbon emission. It does not increase profit in any manner and does not need any expenses. It is a nature of entitlement to reduce carbon emission, however, there....
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....al services as it was paid for managerial services. It was the contention of the assessee that sales commission paid to foreign agent is not taxable in India therefore provisions of section 195 have no application. On appeal, the Commissioner of Income Tax (Appeals) deleted the disallowance following the decision of the jurisdictional High Court in the case of ITO Vs. Faizan Shoes (34 Taxmann.com 79) and the decision of Hon'ble Supreme Court in the case of G.E. India Technology Centre Pvt. Ltd. (327 ITR 456). 9. Departmental Representative vehemently supports the order of the Assessing Officer in disallowing sales commission paid to foreign agents. 10. Counsel for the assessee places reliance on the order of the Commissioner of Income Tax (Appeals) and the decision of jurisdictional High Court in the case of ITO Vs. Faizan Shoes (supra). 11. Heard both sides. Perused orders of lower authorities and the decisions relied on. This issue has been considered by the Commissioner of Income Tax (Appeals) with reference to the contentions of the assessee as well as the Assessing Officer and by following the jurisdictional High Court decision in the case of ITO Vs. Faizan Shoes (supra....
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....ot be treated as income deemed to accrue or arise in India, therefore the provisions of section 195 has no application. It is clear that in order to invoke the provisions of Section 195 of the Income tax Act, the income should be chargeable to tax in India. Here, the commission payments to non-resident in the case of the appellant are not chargeable to tax in India and therefore the provisions of Section 195 are not applicable. In the case of appellant, the facts are similar and the decision of the Hon'ble Supreme Court and also the jurisdictional Tribunal decision referred to above is squarely applicable. Hence, the Assessing Officer is directed to delete the addition made u/s 40(a)(ia} for non-deduction of TDS in respect of commission payments to non-resident. This ground of appeal is allowed." 12. On going through the above order , we do not find any infirmity in the findings of the Commissioner of Income Tax (Appeals) in deleting the disallowance made by the Assessing Officer in respect of sales commission paid to foreign agents. Thus, we sustain the order of the Commissioner of Income Tax (Appeals) on this issue and reject the grounds raised by the Revenue. 13. The last ....