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2015 (6) TMI 512 - AT - Income TaxIncome from sale of carbon credits - Capital receipts vs Revenue receipts - Amount credited in p&l a/c of sister concern, SRGS - SRGS was not registered with UNFCCC, the international body for accreditation for carbon credits - Held that:- The Commissioner of Income-tax (Appeals) has followed the order of the jurisdictional High Court in the case of CIT v. My Home Power Ltd. [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] in which it was 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 concerns.' We 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. - Decided against the revenue.
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