TaxTMI 
TaxTMI 
2021 (4) TMI 587
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....ary to law and facts and circumstances of the case. 2.1 The ld.ClT(A) erred in allowing the assessee's claim of treating the receipt on sale of carbon credit as Capital Receipt though the same is a revenue receipt. 2.2 The ld.CIT(A) ought to have considered the following facts while deciding the issue. (i) It is a compensation for incurring extra cost in using alternate fuel. (ii) It is not awarded for impairment or destruction of any capital structure or source of income of the assessee. (iii) It is a benefit given to the industry for carrying out business by using alternate fuel. (iv) It should be taxable as revenue receipt under section 28(iv). (v) The entitlement to Certified Emission Reduction is akin to import entitlemen....
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....er generation through non-conventional sources i.e., windmills, filed its return of income for the assessment year 2009-10 on 07.10.2009 admitting Nil income. The assessment for the impugned assessment year has been completed u/s.143(3) of the Act on 30.12.2011 by determining total income at Rs. 24,10,36,209/- by making various additions including additions towards difference in sale of WTGs, interest on debentures not paid, lease deposit written off of sundry debtors, cessation of liability towards sundry creditors and interest payable to OBC disallowed u/s.43B of the Act. 5. The assessee carried the matter in appeal before the first appellate authority. Before the learned CIT(A), the assessee has also filed additional ground of appeal ch....
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....OT 31] and also the Andhra Pradesh High Court in case of CIT Vs. My Home Power (315 ITR 82) have upheld the claim. The Petitioner hence begs to submit the following additional Grounds of Appeal. The Petitioner further submits that no fresh investigation is required and the additional ground raised is purely a legal issue. The Petitioner hence prays that the Learned Commissioner of Income Tax (Appeals) be pleased to admit the Additional Ground and thus render justice." 10.2 CIT(A)'s rernarks and decision: The appellant has made a fresh claim through an additional ground as mentioned above. In view of the decision of apex court in the case of Goetze India Ltd.( 2006) 284 ITR 323 (SC) and of Hon'ble High Court of Madras in the case of Ra....
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....However, Assessing Officer treated the said receipt as business income and brought the same to tax - Tribunal held that carbon credit not being an offshoot of business but an offshoot of environmental concern amount received on their transfer had no element of profit or gain - Whether since carbon credit was not even inked with power generation Tribunal was justified in its decision- Held, yes [Para 2] In favour of assessee. 10.2.2. In view of the above decisions which are directly on the point in favour of assessee, the appellants ground on this issue is allowed." 6. The learned DR submitted that the learned CIT(A) has erred in allowing the claim of the assessee regarding treatment of sale of carbon credit as capital receipt, without ap....
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....from sale of CERs (carbon credit) as capital receipt by following the decision of the Hon'ble High Court of Andhra Pradesh in the case of M/s. My Home Power Ltd. (supra), where the Hon'ble High Court held that carbon credit not being an offshoot of business, but an offshoot of environmental concern, amount received on transfer had no element of profit or gain. The Hon'ble Jurisdictional High Court of Madras in the case of Ambika Cotton Mills Vs ACIT (61 SOT 31) had considered an identical issue and held that sale of carbon credit is to be considered as capital receipt. The Hon'ble High Court of Madras in the case of M/s. S.P. Spinning Mills Pvt.Ltd. Vs. ACIT (supra) had once again reiterated its earlier findings in the case of Ambik....