Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 1574 - AT - Income TaxSale of carbon credits - whether sale of carbon credits is not derived from eligible business of generation of power? - whether carbon credits has direct nexus between activity of assessee and income generated for it? - HELD THAT:- As in case of DCIT vs. Kalpataru Power Transmission Ltd. [2016 (4) TMI 916 - ITAT AHMEDABAD] wherein assessee was engaged in business of power generation through biomass power generation unit. It received Carbon Emission Reduction Certificates (CERs) popularly known as ‘Carbon Credits’ for activity of using agricultural waste as fuel. Assessee received certain amount from transfer of carbon credit which was shown as capital receipt. Assessing Officer treated said receipt as business income and brought it to tax. CIT(A) following the decision in case of My Home Power Ltd. [2012 (11) TMI 288 - ITAT HYDERABAD] held that the receipt on sale of carbon credits was a capital receipt and deleted the addition. On appeal, Tribunal observed that assessee was engaged in the business of power generation through biomass power generation unit. It received Carbon Emission Reduction Certificates (CERs) popularly known as ‘Carbon Credits’ for activity of using agricultural waste as fuel. Assessee received certain amount from transfer of carbon credit which was shown as capital receipt. AO treated said receipt as business income and brought it to tax. Whether since carbon credit was not an offshoot of business but an offshoot of environmental concerns, amount received on transfer of carbon credit had no element of profit or gain and, thus, it could not be brought to tax. Ld. Authorized Representative fairly agree to restore the matter to be decided in its facts and circumstances. So, issue is restored to Assessing Officer with a direction to decide the same as per fact and law after providing due opportunity of being heard to assessee. Additional depreciation for wind mills u/s. 32(1)(iia) - HELD THAT:- As in case of CIT vs. VTM Ltd. [2009 (9) TMI 35 - MADRAS HIGH COURT] examined the same issue and dismissed the revenue appeal seeking to disallow additional depreciation u/s.32(1)(iia) of the Act with respect of setting up a windmill by a manufacturer of textile goods. Thus, following the ratio of VMT Ltd.(supra) issue has been decided in favour of assessee with regard to addition depreciation u/s.32(1)(iia) of the Act. Hon’ble Supreme Court in case of CST vs. M.P. Electricity Board (1968 (11) TMI 85 - SUPREME COURT] held that the electricity generated by an assessee is an article or goods. The explanation to amendments (memorandum) as inserted by Finance Act, 2012 as relied upon by CIT(A) cannot be said to overrule and earlier decision of Hon’ble High Court. An amendment that has prospective application cannot be said to retrospectively take away the rights of an assessee qua it’s explanatory notes. Where there is no ambiguity in the Section, there is no warrant for resort to external aids of interpretation namely the notes on clauses and the memorandum explaining its provisions. In the light of decision of VTM Ltd.(supra) with regard to claim of additional depreciation u/s.32(1)(iia) for setting up a windmill, wherein material being sole decision by Hon’ble High Court on the matter, we hold that additional depreciation should be allowed.
|