TaxTMI 
TaxTMI 
2022 (7) TMI 620
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....assessee-company filed its return of income on 30.09.2015 declaring a total loss of Rs. 229,54,99,761/-. The case was selected for scrutiny under CASS. 3. During the year under consideration, the assessee was engaged in the business of (i) Raising of Ore, (ii) Mfg. Of Nitrogen Gas & Ferro Alloys, (iii) Trading of Iron Ore & Ferro Alloys, (iv) Generation of electricity (Wind Power & Solar Power), & (v) Railway Siding for captive use and (vi) Operating Lease of Solar Energy Equipment. During the scrutiny assessments following additions were made: (i) Disallowance under section 14A Rs. 35, 88, 82,480/- (ii) Disallowance of Club Expenses Rs. 107,120/- (iii) Disallowance of common expenses against deduction claimed u/s 80IA Rs. 5,92,7000/- (iv) Carbon Credit treated as Revenue income u/s 28 Rs. 102,05,87/- (v) Disallowance of claim u/s 40(a) Rs. 4,35,810/- (vi) Disallowance U/s 14A added to book profit U/s 115JB also Rs. 35, 88, 82,480/- 4. Against this order of Assessing Officer (AO), assessee preferred an appeal before the ld. CIT(A)-47, Mumbai. A substantial relief was given to the assessee and following additions were....
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....s and travelling expenses are concerned, he accepted the allocation made by the appellant. It has been submitted that the material facts of the year under consideration are same. I agree with the decision given by my Ld. Predecessor. Following the reasoning given in his order, the allocation made by the Assessing Officer is confirmed in respect of the director's remuneration (allocation of Rs.512.23 lakhs) and auditors remuneration (allocation of Rs.4.23 lakhs) however, the allocation made by the appellant is found to be reasonable in respect to legal and professional expenses and travelling expenses and the Assessing Officer is directed not to disturb the same. The appellant thus gets part relief." 16. from the above decision, it is clear that while deleting the addition he followed the earlier decision of CIT (A)-6 Kolkata for AY 2009-10. Therefore, it appears that the merit of the issue was not examined in the above decision. Since the decision of CIT (A)-6 Kolkata for AY 2009-10 is not before me, J am not in a position to offer any comments thereon. Further, my Ld. predecessor while deciding this issue vide order dated 26/12/2017, has followed the order of CIT(A)-6....
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....muneration should be allocated proportionately as calculated by AO and Legal & Professional Expenses and Travelling Expenses are found to be acceptable as done by assessee. 8. We have considered the order of AO, order of Ld. CIT (A) and submissions of assessee. We found force in the contention of assessee that earlier precedents settled in assessee's own case needs to be examined and followed. Hence, on this issue, we restore the matter back to the file of the AO and the ground of appeal is partly allowed. 9. Next ground of appeal pertains to taxability of Carbon Credit received by assessee amounting to Rs. 10, 20,587/-. We have gone through the order of AO and ld. CIT (A). The decisions of various High Courts and Co-ordinate Benches of Tribunal relied upon by the ld. CIT (A) are distinguishable and not applicable to the facts of the case. 10. Issue is whether receipts received by the assessee on sale of alleged carbon credit is revenue in nature or capital in nature. 11. Thus, taking into consideration resolution of litigation on this issue by the Legislature itself, which had made provision for taxation of such receipts at the rate of 10 per cent from the assessment y....
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....ided in favour of the assessee by returning following findings. "7. Considered the submissions of the learned Counsel for both the parties and perused the material on record. While going through the judicial pronouncements relied upon by the learned Counsel for the assessee, we find that the issue for our adjudication is squarely covered by the aforesaid decisions relied upon by the learned Counsel wherein in one of the cases relied upon in CIT v/s My Home Power Ltd., [2014] 365 ITR 082 (AP) (supra) filed by the Revenue, the Hon'ble Andhra Pradesh High Court held that the Tribunal had factually found that Carbon Credit was not off-shoot of business but off-shoot of environmental concerns and no asset was generated in course of business but it was generated due to environment concerns. Further we find that the Hon'ble A.P. High Court agreed with the factual analysis as the assessee carried on business of power generation and Carbon Credit was not even directly linked with power generation. It is held that on sale of excess Carbon Credits income was received and the Tribunal correctly held that it is capital receipt and could not be a business receipt or income. As a....