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2018 (6) TMI 1735 - ITAT MUMBAIAddition made on account of interest expenditure - advancement of loans - HELD THAT:- We find that the assessee had advanced loan to AHPL for its business, that the financial institutions had advanced loans for a specific purpose, that the borrowed funds were utilised for those purposes only. It appears that the AO had not understood the real character of the loans availed by the assessee. He had not also considered overall availability of the loans sanctioned by the financial institutions. FAA had given a finding of fact that borrowed funds were not utilised for the specific purposes and that the assessee had used its own funds for making investments. The available funds with it were in excess of the investments. Considering these facts, we are of the opinion that there is no need to interfere with the order of the FAA. So, confirming his order we decide the first effective ground of appeal against the AO. Sale of Carbon Credits - capital receipts or business receipts - HELD THAT:- “Carbon credit” is not an offshoot of business but an offshoot of environmental concerns. No asset is generated in the course of business but it is generated due to environmental concern. ITAT agree with this factual analysis as the assessee is carrying on the business of power generation. The carbon credit is not even directly linked with power generation. On the sale of excess carbon credits, the income was received and hence as correctly held by the Tribunal it is capital receipt and it cannot be business receipt or income. See M/S. MY HOME POWER LTD., [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] . - Decided against revenue.
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