2015 (12) TMI 1852

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....ppeal is with regard to treatment of carbon credit receipts. 3. We have heard both the parties and perused the material on record. Similar issue was considered by the Tribunal in the case of M/s. Arun Textiles Pvt. Ltd.in ITA No.2174/Mds/2014 dated 19.6.2015, wherein it was held as under: "4. We have heard both the parties and perused the material on record. In our opinion, carbon credit is in the nature of "an entitlement" received to improve world atmosphere and environment reducing carbon, heat and gas emissions. The entitlement earned for carbon credits can, at best, be regarded as a capital receipt and cannot be taxed as a revenue receipt. It is not generated or created due to carrying on business but it is accrued due to "....

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....service for carrying on the business. In our opinion, carbon credit is entitlement or accretion of capital and hence income earned on sale of these credits is capital receipt. The same view is supported by the following judicial precedents, which are relied on by the ld. AR: 1. CIT v. My Home Power Ltd. (2014)[365 ITR 82](AP) 2. My Home Power Ltd. v. DCIT (2013)[21 ITR(Trib) 186] (Hyd) 3. Ambika Cotton Mills Ltd. v. DCIT (2013) [27 ITR (Trib) 44] (Chennai) 4. DCIT v. Salona Cotspin Ltd. in ITA No.426/Mds/2013 for AY 2009-10 5. Sri Velayudhaswamy Spinning Mills (P) Ltd. v. DCIT in ITA No.582/Mds/2013 for AY 2009-10 6. Sri Matha Spinning Mills Pvt. Ltd. v. DCIT in ITA No.617/Mds/ 2013 for ....

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....n of earlier years, which have been absorbed, cannot be notionally carried forward and considered in computing the quantum of deduction u/s.80IA. 5. After hearing both the parties, in our opinion, this issue is covered by this Tribunal in favour of the assessee in the case of M/s. Ambika Cotton Mills Ltd. & Others in ITA Nos.1958 & 1959/Mds/2015 etc. dated 8.12.2015, wherein the Tribunal observed as under: "2. We have heard both the sides and perused the material on record. The only issue arises for onsideration is with regard to deduction claimed by the assessee under Section 80-IA of the Income Tax Act, 1961 (in short ''the Act'') in respect of windmills. The Assessing Officer rejected the claim of the assessees on the ground ....