TaxTMI 
TaxTMI 
2016 (8) TMI 1574
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....ed from eligible business of generation of power. The Appellant has satisfied all the conditions of sec. 80-IA, and hence, is eligible for deduction. 2. The learned CIT (A) failed to appreciate that sale of carbon credits is not an independent activity of the Appellant and that he received carbon credits due to generation of power through windmills, which is eligible business for the purpose of sec. 80-IA. Hence, deduction u/s 80-IA may be granted on Rs. 10,88,689/-. 3. Without prejudice to the above, the learned CIT (A) failed to appreciate that the amount of Rs. 10,88,689/- received on sale of carbon credits is a capital receipt, and hence, is not taxable. Additional depreciation - Rs. 2,19,29,891/- 4. The learned CIT (A) erred i....
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....the enterprise as it is intrinsically linked with the production of clean energy. So, it was requested that sale of carbon credits should be considered as revenue receipt, it goes finally towards reducing the cost of the production of energy. Ld. Authorized Representative relied on the decision of Hon'ble Karnataka High Court in case of CIT vs. Subhash Kabini Power Corporation Ltd. [2016] 69 taxmann.com 394 (Kar.) (HC). In this case, issue was whether carbon credit was generated out of environmental concerns and it was not having character of trading activity, receipt from sale of carbon credit was capital receipt and not business income. In case before us, issue is whether carbon credits has direct nexus between activity of assessee and in....
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....airly agree to restore the matter to be decided in its facts and circumstances. So, issue is restored to Assessing Officer with a direction to decide the same as per fact and law after providing due opportunity of being heard to assessee. 2.1 Next issue is with regard to additional depreciation of Rs.2,19,29,891/- on two windmills acquired and installed by assessee during the year, which was confirmed by CIT(A). As stated above, assessee is engaged in the business of generation of power. During the year two windmills were acquired and installed. Assessee claimed additional depreciation of Rs.2,19,29,891/- u/s.32(1)(iia). Assessing Officer disallowed same by relying of the decision of Tamilnadu Chlorates [2006] 98 ITD 1 (Chennai) (Trib.). C....