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2021 (3) TMI 1004 - AT - Income TaxMAT computation - exclusion of profit realized from sale of carbon credit to form the book profit - HELD THAT:- As decided in own case [2018 (4) TMI 1776 - ITAT DELHI] held that income from sale of the carbon credit is capital in nature. Further in para No. 14 it has held that since the income from the sale of carbon credit is essentially in the nature of capital receipt, by no stretch of imagination can be brought to tax under the provisions of minimum alternate tax and thus the ground of appeal of the assessee for Assessment Years 2010-11 and 2011-12 were allowed. In view of the above facts, as the co-ordinate bench has already decided the issue in favour of the assessee, respectfully following the same, we allow first ground of appeal of the assessee. Deduction under Section 80IA - Claim of interest income earned on bank deposit claimed as interest income eligible for deduction under Section 80IA - HELD THAT:- Assessee has earned interest income from the fixed deposit receipts. Assessee has submitted that the interest income from short term FDR is only a temporary arrangement for making timely re-payment of loan installments on respective due dates out of the proceeds of the FDR. The interest income has direct link with the industrial undertaking. As assessee has borrowed from banks and financial institutions a sum of ₹ 329 crores and, therefore, the assessee is required to keep funds in fixed deposit receipts for short term for honouring the installments of the loan. Therefore, it is an eligible income derived from industrial undertaking for the purpose of deduction under Section 80IA of the Act. Coming to the decision in CIT Vs. Chambal Fertilizers & Chemicals Ltd. [2017 (5) TMI 1595 - RAJASTHAN HIGH COURT] it was held that placing of fixed deposit receipts was a mandatory condition on the assessee. Where in the interest was received from trade debtors and Overdue payment from debtors. That is not the fact here. In our opinion the issue is squarely covered in favour of revenue by decision of Honorable Supreme court in case of Liberty India v. CIT[2009 (8) TMI 63 - SUPREME COURT]with respect to interest on FDR as it is not derived from the industrial undertaking. Thus, Ground no 2 of appeal is dismissed. Disallowance u/s 14A - HELD THAT:- As assessee has not on any exempt income during the year from the above investment and therefore there cannot be any disallowance u/s 14 A of the income tax act. This is an accepted position in the case of the assessee as per the order of the coordinate bench in assessee’s own case for assessment year 2008 – 09. Such is also the mandate of the honourable Delhi High Court in case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] wherein it has been held that if there is no exempt income received or receivable during the year there cannot be any disallowance u/s 14 A of the income tax act. Therefore respectfully following the decision of the coordinate bench as well as the decision of the honourable Delhi High Court we do not find any merit in the ground number 1 – 4 of the appeal hence, those grounds are dismissed. Deduction u/s 80IA which is a rental income - HELD THAT:- No merit in the appeal of the learned assessing officer on this ground because the refund received from Power Finance Corporation for the excess charges made in the earlier years which has now been returned back of ₹ 3.81 lakhs, liability which were arising out of the business which are now no longer required have been written back by the assessee of ₹ 18,000 and the rent is recovered from the plant site used by the other parties on which the rent is recovered of ₹ 108,000 are necessarily the income derived from the industrial undertaking and therefore they go on to reduce the respective expenditure and hence the deduction u/s 80 IA of the income tax act on them has rightly been allowed by the learned CIT- A. Accordingly the ground number five of the appeal of the learned assessing officer is dismissed. Carbon credit earned by the assessee - Whether is a capital receipt and not subject to tax? - HELD THAT:- We find that the above issue is squarely covered in the favour of the assessee by the decision of the honourable Andhra Pradesh High Court in case of CIT versus My home power Ltd [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT]
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