2012 (11) TMI 1321

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....ri M. Narayanan For the Respondent : Shri Guru Bashyam, IRS, JCIT ORDER PER Dr. O.K. NARAYANAN, VICE-PRESIDENT This appeal is filed by the assessee. The relevant assessment year is 2009-10. The appeal is directed against the order of the Commissioner of Income-tax(Appeals)-I, at Coimbatore dated 16.4.2012 and arises out of the assessment completed under sec.143(3) of the Income-tax Act....

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....he learned Commissioner of Income Tax(Appeals) should have held that the assessee is eligible for the deduction of Rs. 20,25,207 being the income from sale of Carbon Credit is eligible for deduction u/s 80IA(4)(iv)(a) of IT Act. 6. For these and other grounds that may be taken, it is respectfully submitted and prayed that the orders of the Authorities below may be reversed and deduction u....

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....td. v. DCIT (27 Taxmann 27) wherein the Tribunal has held that carbon credits available to the assessee are in the nature of capital receipt and therefore, not at all taxable as income. We do not endorse the above view. Income arising as a result of carbon credits awarded to an assessee is gains earned in the course of carrying on business. Therefore, we are inclined to reject the additional groun....

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....nd still could claim deduction under sec.80IA. Therefore, we direct the Assessing Officer to grant the assessee the benefit of deduction under sec.80IA treating the windmill as a separate and independent business unit. 6. Once the above stand is upheld, the next question is whether the income from carbon credit is to be assessed under other sources or under the head business. There is no basis ....