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2015 (11) TMI 1055 - AT - Income TaxTreatment of carbon credit receipts - assessee admitted receipts from trading of carbon credits as revenue nature and included the same for computation of deduction under section 80-IA - Held that:- It is a credit given to the assessee under the Kyoto Protocol and because of international understanding. Thus, the assessees who have surplus carbon credits can sell them to other assessees under the Kyoto carbon credits to have capped emission commitment under the Kyoto Protocol. Transferable carbon credit is not a result or incidence of one's business and it is a credit for reducing emissions. The persons having carbon credits get benefit by selling the same to a person who needs carbon credits to overcome one's negative point carbon credit. The amount received is not received for producing and/or selling any product, by-product or for rendering any service for carrying on the business. The receipt from sale of carbon credits has to be considered as capital receipt and accordingly, it is not taxable. Thus, there is no question of considering the same for deduction under section 80-IA of the Act. - Decided in favour of assessee.
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