TaxTMI 
TaxTMI 
2016 (4) TMI 1487
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....g the facts of the case; 3) Treating the CER receipts as capital receipts and the same is not includible in the book profit u/s 115JB of the I.T. Act, without appreciating the facts of the case; Assessee's Grounds in cross objection : 1. That on the facts and in the circumstances of the case, the ld. Commissioner of Income-tax (Appeals), was not justified and erred in law in upholding the action of the Assessing Officer in disallowing profit on sale of fixed assets amounting to Rs. 84,16,219/- and profit on sale of investments amounting to Rs. 64,22,68,406/- while computing book profit under section 115Jb of the Act. 2. That on the facts and in the circumstances of the case, the ld. Commissioner of Income-tax (Appeals), was not justified and erred in law in confirming the disallowances made by the Assessing Officer on account of gift expenses to the tune of Rs. 2,76,000/-. 3. That on the facts and in the circumstances of the case, the ld. Commissioner of Income-tax (Appeals), was not justified and erred in law in confirming the disallowances made by the A.O. on account of telephone and mobile expenses to the tune of Rs. 3,60,000/-. 2.....
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....d under bilaterial trade agreements. The assessee has explained that the India Energy Exchange Rates adopted by the assessee is the market value in respect of power sold which has been merely substituted by another value by the AO. The AO has not pointed out any discrepancy in the method adopted by the assessee. It has not been shown that the transfer by the industrial undertaking does not correspond with the market price. Similar issue has been decided by the ITAT Jaipur Bench in assessee's own case in ITA No. 503/JP/2012 and others vide order dated 27.01.2014 for the assessment year 2007-08 and the additions made have been deleted. The ld. CIT (A) taking into consideration the above facts, has deleted the disallowance made the AO for the year under consideration. 6. Now the revenue is in appeal before us. 6.1. The ld. A/R for the assessee has submitted that the above issue is covered in favour of the assessee by the order of ITAT in assessee's own case for A.Y. 2007-08 in ITA No. 503/JP/2012 dated 27.01.2014 wherein it has been held that - (1) Value adopted by assessee as per independent third party trading transactions or as per Power Exchange (IEX) etc.) constitu....
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....he eligible unit is located) constitute 'Market Value' in terms of explanation to section 80IA(8); (b) The value at which State Grid has sold power to the Cement Unit of the Assessee (average annual landed cost) also constitute 'market value' in terms of explanation to Section 80IA(8) but the value at which State Grid or third party has purchased power from the Power Unit of the Assessee, which represents its power which is sold when not required by the Cement Unit, does not constitute 'market value' in terms of explanation to Section 80IA(8). It is the 'principle' and not the 'quantum' which is deciding factor; (c) Where a basket of 'market values' are available for the relevant period and relevant geographical area where the eligible unit is situated, the assessee has discretion to adopt any one of them as market value; and (d) If the value adopted by the assessee is 'market value' as explained above, it is not permissible for Revenue to recompute the profits & gains of the eligible unit by substituting the said value (as adopted by the assessee) by any other 'market value'. Respectfully following the decision of the coordinate bench of the Tribunal,....
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....he A.O. and submitted that the receipt on account of carbon credit is related to the business of the assessee and the assessee has undertaken activities which has resulted in the receipt on account of carbon credits. Hence, the amount so received has to be considered as related to the business of the assessee and should either be considered as revenue receipts chargeable to tax as business income, or the net amount after deduction of expenditure, if any, incurred for the same should be considered as chargeable to tax under the head capital gains. 9.3. We have heard rival contentions and perused the material available on record. We find that the issue is squarely covered in favour of the assessee by the order of Jaipur Bench of the Tribunal in the assessee own case for the A.Ys 2008-09 vide order dated 27.01.2014 in ITA No. 504/JP/2012 wherein the Tribunal has discussed the matter at great length at pages 31 to 37 of its order. It is noted that decision in case of My Home Power Ltd. relied upon by the Tribunal has since been confirmed by Hon'ble Andhra Pradesh High Court, 365 ITR 82 (AP). The operative portion of the Tribunal's order is reproduced hereunder :- "38. We fi....
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.... has been held that the receipt on account of transfer of carbon credit which is held to be a capital receipt needs to be excluded from profit while computing the book profit u/s 115JB of the Act. 11.2. Hon'ble Kolkata Tribunal in the case of DCIT vs. Binani Industries Ltd. (ITA No. 144/Kol/2013 dated 02.03.2016) has held that capital receipt which is not chargeable to tax under any provisions of the Act would not be liable for book profits tax u/s 115JB of the Act. 12. We have heard the rival contentions and perused the material on record. We find merit in the contention of the ld. A/R that the issue is squarely covered in favour of the assessee by the earlier order of the Tribunal in ITA No. 504/JP/2012 dated 27.01.2014. The coordinate bench of the Tribunal in the aforementioned case has decided the appeal in favour of the assessee by observing as under :- "40. Ground No. 8 is on account of disallowance of carbon credit in computing Book Profit u/s 115JB of the Act. This issue stands covered on principle in favour of the Assessee vide the order of the Hon'ble ITAT dated 9th Sept. 2011 for AY 2004-05, 2005-06 and 2006-07 in Appellant's own case in ITA No. 614, 615 a....
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....action of the AO sustaining the disallowance by relying on the decision of the ITAT Jaipur Bench for the A.Y. 2007-08 by observing as under :- " 6.3. I have considered the contentions of the appellant as well as assessment order. It is seen that similar issue was involved in A.Y. 2007-08 where out of the gift expenses of Rs. 47,11,876/-, the disallowance of Rs. 16,00,000/- was confirmed by the Tribunal based on the decision of the Tribunal dated 23.12.2009 for the A.Y. 2003 04. In view of above, the disallowance made by the AO on account of non business purpose of the above expenses to the extent of Rs. 2,76,000/-." 14.2. We have heard the rival submissions and perused the material on record. We find that the facts for the year under consideration are similar with the facts of earlier year. Following the above decision of the ITAT, we uphold the order of ld. CIT (A) and confirm the disallowance. 15. Third ground of the assessee relates to disallowances on account of telephone and mobile expenses of Rs. 3,60,000/-. We find that the identical issue has been decided by the Tribunal in assessee's own case vide order dated 27.01.2014 in A.Y. 2007-08 in ITA No. 503/JP/2012....